Version 4 is only supported from Seafile 8 and up.
But no reason to worry, version 3 is fine, atleast what the docs says that AES128 is “unsecure” is completly garbage.
I cant say if the actual implementation of seafile might have a flaw and therefore version 3 might be insecure, but the doc only says AES128 is insecure, which is just not true. Most modern browsers prefer AES128 instead of AES256 for performance gains, since 256 is just full paranoia mode.
maybe they have just read it in a best practice guide or something else, that they should use AES256.
AES256 becomes especially interesting for quantum computers