Just looked at how my seat latch operates....
The release lever or 'activator' with the red indicator is connected to the upper catch by a metal rod which pulls the upper catch ^ up when you pull the latch to fold the seat - the lever has a spring tension to it - when the upper catch is pulled up, this allows the lower catch to move, which then allows the seat back to move forward (by releasing the lower catch from the anchor bar)
What I am trying to say is - has the metal rod become detached from the upper catch? (the metal rod is secured to the upper latch with a circlip) - if the lever still has the spring tension, you may not notice if the metal rod has come adrift.
It looks as though you should be able climb into the boot area of your car and (by using a small screwdriver) release the upper catch and therefore allow the seat to move - so as you would be able to get a better view of the latch area and see if the bar is still connected.
Has this helped ? - Maybe... - Confused ? - More than likely!
I tried to help...
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