Have you ever smelled cedar after it has been confined?
Did you know that many girls used to be given a cedar chest to keep things like linens they were saving for use once they got married? A smart young man might want to know something about the girl's "hope chest" before he proposed. That was an indication of how thrifty and industrious she was, similar to her wanting to know what his job prospects were. The cedar gives off a vapor that keeps the bugs out.
Enough of showing my age.
When the cedar is in a big chunk, like when a log or limb is used as a roost, and it is in a reasonably ventilated area, it's not a big deal. It does not give off enough vapor to cause the chicken any respiratory problems. If it is in a confined space and there is enough cedar, it might be a problem, but realistically, don't worry about it. A limb does not have enough surface area to give off enough harmful vapors to cause a problem.
But if that same cedar is shaved into thousands of very thin shavings, you are creating a while lot of surface area to give off that vapor. Some brooders can be fairly confined spaces. It's possible that vapor could build up enough to cause problems. That's why people say don't use it. It's not that it will absolutely without a shadow of a doubt each and every time kill 100% of your chicks if you use it, but it can. It's a simple precaution to take to protect your chicks.