{sei ... se'u} inside {lu ...li'u} must be a part of the quote however xorxe's Alice in Wonderland uses that to translate quotes split into several parts. I'm not the only person who thinks that this is wrong.
IMO {sei} has at least three different meanings.
1. As an alternative to UI ({sei mi gleki ~= .ui})
2. As an alternative to moving the outer bridi into the inner bridi ({do melbi sei mi jinvi}={mi jinvi lo du'u do melbi})
3. To translate partitioned quotations.
All of these meanings are actually the same. In every case, it's "meaning #2".
{.i do melbi sei mi cusku} -> {.i mi cusku lo se du'u do melbi}
{.i ui do cinba mi} -> {.i sei mi gleki do cinba mi} -> {.i mi gleki lo nu do cinba mi}
Personally, I disapprove of sei-within-lu for partitioned quotes, for the simple reason that one can't unambiguously determine whether the sei-clause is actually spoken, unless {sa'a} is used (which it usually isn't).
Some time ago i proposed {xoi} to replace the second meaning of {sei}. And now here is my solution for the third meaning.
Replacing any meanings of sei with another word is unnecessary because {sei} only really has one meaning.