Most of the time when wood rots, it still sequesters CO2. If it didn't, you wouldn't be able to create soil through the accumulation of biomass. All the dirt would be mineral only, and no black soil would exist anywhere. The blackness of black soil is due primarily to carbon. Which isn't floating around in the air.

Seems like the difference in timescale between soil creation and wood decomposition would argue against sequestration occurring "most of the time." Soil biomass might represent only 1% or so of decomposition products. But I haven't seen any actual figures...

Trees are big and take up a lot of room, but there's way way way more dirt than trees. Good soil is actually upwards of 5% organic matter which is non-trivial. 5% of all the good dirt left in the world is a very big number and probably dominates the weight of trees on the planet.