Disagree. Chris's point regards direct seed-stage investment from a VC, where a "pass" on funding an A-round indicates that the VC lost interest over time (suggesting that they might be disappointed in execution, think the market is no longer there, etc.).

My understanding is that Sequoia is simply providing more capital to YC, and that YC handles all the decision-making with regards to company selection and investment. For Sequoia to "pass" on investing in a YC-funded company after the seed stage is not the same situation.. they never "selected" the seed-stage funding recipient in the first place.

Edit: Regardless, this is all a silly thing to be concerned about. If your idea is even remotely viable, your execution is solid, and you have determination, you will find traction and success (and investment, if you really want it). If you're sweating things like this, you're getting distracted from the things that matter.