I'll let you decide whether the “Sedition” charges were false or not.
This isn't a matter of how inflammatory the statements appear to be several generations later. A meaningful opinion today would require an understanding of the specific charges
Rutherford and his associates were charged under the Espionage Act of 1917 with interfering with the ability of the United States to raise an army during wartime. (As Borgia points out above.)
The exact verbiage in the indictment was, "...did conspire, combine, confederate and agree together, and with divers other persons to the said Grand Jurers unknown, to commit a certain offense against the United States of America to wit: the offense of unlawfully , feloniously and wilfully causing insubordination, disloyalty and refusal of duty in the miltary and naval forces of the United States of America when the United States was at war..."
Although the convictions today are regarded as the product of wartime hysteria, technically they were arguably guilty.
Even today this is illegal and the concept of "Disassocation" as opposed to "Disfellowshipping" was dreamed up to circumvent that fact. If JW's were actually punished by church tribunal for joining the military, the leadership could conceivably wind up in hot water again. By making it a matter of willful disassociation, their role becomes entirely passive.