This feature requires that JBoss EAP gets updated to Seam 1.2.1.GA, 1.2.0.x does not contain this feature.

classes put into META-INF/dev will be hotdeployed.

See description here: http://docs.jboss.com/seam/1.2.1.GA/reference/en/html/gettingstarted.html#d0e2438

It only makes sense to put code that is generate into src/action

entities cannot be hotdeployed.