I dunno what exactly happens. I suspect some fall, some get into the fermenter. Either way, the steep is what makes the magic.
But then again -- it depends on what you're looking for with the finished brew. I like my pumpkin ales with the spices in the background -- just a hint. I know Southern Tier makes 'Pumking' -- and I like it very much -- but I wouldn't call the spices in the background.
Part of what's driving my own experimentation is that I've ruined several brews with heavy-handed spices. And when I say ruined, I mean that literally -- the spices were just too overpowering and never really mellowed with age. (Folks will say give it time -- but two years is a long time, and they're still in your face powerful. I dumped a batch from several years ago -- simply because the spices never mellowed with age.)
Now, I just give myself over to the fact that if there's a hint of spices -- that's enough for me and the folks that drink my brew. If a pumpkin ale has a slight taste of ginger and cinnamon and clove -- then that's all I need. My brew is pretty good pumpkin ale -- fizzy, not too heavy (1.050 or so), with a distant spice. Folks love it -- so that's enough for me.
I've thought about making one that's very heavy -- essentially a pumpkin IIPA -- with a heavy mouthfeel, big alcohol (1.075+), and big, bold spices light on the hops -- but I've not gotten around to trying it. My goal right now is to make session brews that taste good. The big stuff interested me when I first started brewing -- it was a kind of "alcohol challenge" -- but now I'm interested in making session brews -- light-ish on the alcohol (5.5% or less), but big on the taste.