I don't get the reasoning, you could reset the cold storage device without sending funds anywhere if you have your seed backed up.

Fare point. I want to generate a new seed on the device. I could just import the current seed into sparrow making it a hot wallet rather than incurring fees by transferring it to a completely new hot wallet.

That works! I did it before too because I wasn't 100% certain my previous seed was generated with enough entropy.