See the Overview section of the doc to see the algoritm. When I read the doc, it sounds like the MAXITER= and the REPLACE= option are independent. The MAXITER= option specifies how many times you should repeat Step 3 if the algorithm. The REPLACE= option specifies how Step 3 occurs.
I've never used the REPLACE= option, but to me the doc says that your code will use random seeds.as the initial cluster centers. Because you've set REPLACE=NONE, those centers will not change for the next 10,000 iterations.