We always locate the seam where it is least noticeable. Realistically, the expanding ice wouldn't affect the letter at the Jewelite seam any more rapidly than it would affect the letter in other places. Therefore concealing the seam in a discrete spot makes more sense than locating it for weather durability reasons.
But you asked for us to weigh in on the theoretical argument of ice expansion in a seam, so the real question is where the liquid water will stand long enough to freeze. Surface tension is the key here. A seam on the side will allow the water to be pulled along the surface of the letter via gravity. A seam at the top or bottom will actually give the water a better nook to stagnate and freeze.
Think about the Jurassic Park scene where Malcolm sets a drop of water on Sattler's hand. She thinks the water will slide off but the roughness of the hair and skin gives the water something to grab onto. The seam is what would grab the water in this scenario and if gravity can't pull the water down, the water will naturally congregate in the seam, where the material is least smooth. Alternatively, if the seam is on the side, gravity can pull the water across the seam just like if you put the drop of water on the side of your hand.