Farcaster has been a nice refreshment for me. Currently a lot of developer types are present on the platform and I've seen lots of insightful conversations there.
Tokens are frozen "in-place" pending investigation. It differs from how it works with btc, because the government does not have control of the private keys that manage the addresses in question - so they go to Tether who controls the smart contract that manages the transactions of the tokens.
This, in practice, means that the US government controls the mentioned tokens for the moment. What happens with them depends entirely on the outcome of the investigation.
Neither of those statements is true. Bitcoin seized by US government is often sold off in auctions[1]. Tether seized by the government could also be redeemed for fiat eventually, following due process.
EDIT: I see now that you were actually comparing the case of USDT freeze against Bitcoin seizures. Nevertheless, Tether doesn't simply get to keep the USD value of the frozen tokens. US government would want to recover that.