A lot of the fertilizers you buy use urea as their nitrogen source, and baby roots when they encounter 'large' (I have never seen that defined anywhere what 'large' means) quantities of urea nitrogen they get "burned" (cell membranes irritated because they are young, or something; same reason your lawn gets 'fertilizer burn' if too much is applied in one area).

The manufacturers of fertilizers with different forms of nitrogen, such as ammoniacal or nitrate, imply their products will not burn roots, but still advise using 1/2 or 1/4 strength for seedlings.

Getting back to your question. Perhaps a rich in nutrient soil does not have the forms of nitrogen which can 'burn' roots, but that is speculation on my part. I know of no studies on the topic and I spent no effort to try and find out.

Interesting. Dan, compost support can be an issue, but I have fixed that by making sure the compost is well pressed down. Compost has an extremely hard time becoming compacted (I've never been able to compact it), but it can be firm enough if pressed down much more than your average potting mix. That being said, the compost I've gotten recently is a bit sludgy so I'm adding vermiculite and peat to it before I start my next batch of seeds...

What I've seen is that they say to use a nutrient-less soil with just peat and perlite/vermiculite, as it will burn seedlings to have nutrients before they develop enough true leaves to use it. Then add fertilizer after they've gained their leaves. As you said, fertilizer leaching could be the real reason that is said, and maybe somewhere down the road someone misunderstand and thought it was nutrient burn, and it's escalated?

Yes, actually, I wouldn't add fertilizer until after the first real leaves come out, but I don't think it would hurt in the cotyledon stage. Interesting idea about compressing compost to make it more supportive. I never thought of doing that. Of course, there is nothing "nutrient rich" about compost. Thoroughly composted stuff is quite thin in nutrients. It's a popular myth that compost fertilizes plants. It does, an eensy weensy little bit. But regular fertilizers are vastly better.

I think, for me, it's partially the microbial life that my plants like in compost- of course, I have had good results adding some supplemental fertilizer when needed, as , as you said, it is fairly thin in nutrients...

I sterilize my seedling mix. Ain't no microbial life in that. My seedlings do great.