The only time you would continue to accrue that seniority would be if you were bumped or laid off from that position and failed to exercise your seniority in that classification to its fullest extent.
If you chose to go from Lead to mechanic just to stop from going from days to mids, you would lose all the seniority in the lead classification.
For instance, a layoff of 5 lead positions was announced at the station. There are 10 leads. You are the number 5 lead in lead seniority. If you stay as a lead, the one spot left is Tue/Wed RDO on the mid shift and you may be there for 10 years so you chose to bump down to a mechanic position. You could then bump using your mechanic seniority to the shift and days off your choice, bumping the junior mechanic in that slot. You would then lose any accrued lead time and would have to start again with zero lead time if you ever chose to bid one. You would also not have any recall to any lead position since you no longer hold seniority in the classification.
This is what we had under IAM at NWA and at AMFA. It worked well and was generally liked. You also had the classification of Inspector and Lead Inspector. They each had there own seniority list. Although in order to bid a lead inspector, you had to hold inspector seniority. Just like to bid a lead mechanic, you had to hold mechanic seniority.
Vacation was always bid using classification due to the needs of the service. A lead would not bid with his crew and could not stop a mechanic from taking a spot of vacation based on date of hire. Overtime was the same way.
I could see if I can find an old contract, but the IAM has used that system forever. AMFA adopted it as well.