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Putting aside the fact that the claim made about rancid oil is pure fiction, the answer to your question is no. A cast iron pan is seasoned by carbonizing and polymerizing the oil under high heat, and what’s left can’t go rancid and isn’t really oil anymore.

It’s a very different process “seasoning” creates a thin carbon layer on the surface of them metal and essentially what it does is to fill all the small gaps that normally would allow food to get into and stick it’s essentially very simmilar to Teflon and other non-stick coatings.

That is exactly what pan seasoning is. It's why the oil you use matters. The patina on a seasoned pan is a crosslinked polymer.

The chemicals that make rancid oils taste and smell bad are generally the smaller bits that come off the molecule when its double bonds are attacked by oxygen: the aldehydes and ketones, and the short saturated fatty acids like butyric acid.