In case of Selaginella, the development of zygote into embryo takes place within the female gametophyte. This female gametophyte is retained on the parent plant for variable periods .  This is considered as a precursor of seed habit because advanced version of this phenomenon is seen in higher plants; like gymnosperms and angiosperms.  

But unlike seeds in higher plants; the embryo in Selaginella needs to quickly develop to begin the new generation. However, there could be temporary suspension of embryo growth; which is similar to seed dormancy in higher plants.