Following crafting a weapon with "High" Elderseal, I have used it in a hunt against each of the game's unique Elder dragons along with a fellow hunter who also brought a similar "High" Elderseal weapon in the hopes of seeing any unique effects.
In each case, after an amount of time damaging the Elder dragon with Elderseal not unlike trying to stack a status effect such as paralysis or blast on a monster, unique effects occurred. The following was what I observed.
Story and monster spoilers follow
- Teostra: Small stagger while enraged, with the fiery mane and blast powder dispersing and disappearing, removing the danger of being blastblighted and having your health automatically decease when near him temporarily
- Kushala Daora: Small stagger, strong wind pressue and windy aura disperses temporarily
- Nergigante: Visible breakage of regrowing spines while being hit with Elderseal, eventually leading to a small stagger that removes the damaged spines entirely, preventing armor buildup and giving access to weak points where the spines were removed
- Kirin: Small stagger, temporary removal of electric charge on mane that causes most attacks to bounce
- Vaal Hazak: Removal of effluvia gas around its body, preventing the danger of continual exposure and contracting the effluvia status condition
- Xeno'jiiva: Small stagger, lowers what you could consider the "heat buildup" in the dragon, bringing the blue glowing elements back down to the head, front legs, and tail. Seems to remove a several of the "heat" attacks such as the dragonblight explosions and the laser.
In every case, we were able to produce a small stagger similar to the ones produced by most slinger ammo, most notably the crystalburst from the Elder's Recess, or repeated hits with a Bomb or Piercing pod. The stagger and effect removal lines up with what the Hunter's notes provides for the Elder dragons as well. The stagger looks to be indicated by a small explosion of black particles from the monster.
This ability sealing is not permanent and can't be kept up with continued application of the status, and it doesn't seem to cause Elder dragons to stagger at random; you rather have to "turn off" their aura/ability which causes them to stagger temporarily. There will be cases where they enrage and keep their ability for some time while you try to remove it. This seems to point to Elderseal being similar to blast, paralysis, or sleep in the case that you build up a condition to an immediate effect, and not poison which is an effect with a duration.
It should be noted that Dragon pods, dropped exclusively by Elder dragons, also display the stagger and ability negation of Elderseal weapons. This makes sense as they are otherwise unremarkable, usually hitting Elder dragons for around 10 damage per pod.
As expected, YouTubers have eventually gotten around to this. For an explanation with visuals, see GaijinHunter's video: