While attempting to attach DWG file with similar coordinate points to the master DGN file the DWG reference attachesin wrong location. When this happens the assumption is the DWG file location point is wrong or that MicroStation is not attaching DWG files correctly.
There appears to be a misconception of how DWG and DGN file should line up. When attaching DGN file to another DGN file and the master and reference don’t line up the coordinate points in most cases are different. When the same thing happens attaching a DWG reference file the same thing is assumed; using this method is not a good way to check the reference alignment.
In both of these options the working unit settings in the seed file is being utilitize to determine the unit setting of the attached DWG file. This will ensure that the DWG attachment units will match the current file that the attachment that is being made and properly aligned when the coordinates match.
AskInga - Working Units and Survey Feet
Opening a DWG file & the Units of the design