The answer is basically that they don't know at this point. (Reference: I did extensive research on CLT as part of a project in LA a few years ago and talked to CLT experts from the Wood Products Council)

CLT is stiffer than plywood, and the construction techniques are closer to steel/concrete, so it'll likely need reinforcement or dampering. Traditional wood buildings these days are designed to flex in earthquakes.

But it hasn't been extensively tested for seismic properties yet

Is the main difference between CLT and plywood that CLT is a crossed grain stack of sawn lumber instead of peeled veneers?

I don't know a huge amount about the manufacturing of the materials, so I'm not sure. The binding material may also be different for CLT.

Yes..ish. Because plain-sawn veneers also exists so plywood can be made the same way.

Pretty much, CLT is basically plywood with very thick laminations.

True, but worth noting plywood is spiral shaved veneers which are unrolled glued with the curves counteracting This is quite different from sawn dimensional lumber. Plywood is entirely cut tangent to the grain / tree rings.

Plywood is much weaker essentially because trees evolved to withstand wind and the veneers are cut perpendicular to wind loads.

As I understand it, the modern trend for buildings that are concrete on the first floor and wood frame for 2-5 floors above that started with earthquake-resistant designs. So they can probably play on that model.

That's incorrect. The structural properties are completely different.

Movies demonstrating how CLT building standup to earthquakes and fire: https://alexschreyer.net/engineering/much-abuse-can-cross-la...