If there is any grammarian here, please correct me if I am wrong.
Given the 2 choices, I would say # 2 is more accpetable.
When some one
is seen, even he is not doing anything but sitting down on a park bench,
'sitting" is still an act. So the logical deductive reasoning is
"he was seen sitting there on the park bench..." is correc and has no bearing on whether the act was completed or not. "Was seen..." already took care of the tense.
# 1 looks grammatically correct but it sure sounds awkward to my ear.
1) He was seen to walk in the street,
2) He was seen walking in the street,