Damping off is a disease that usually only affects seedlings.

If the area around the stem is kept moist, and warm, a fungus (I believe, may be a bacteria) attacks the stem. It looks like it has been pinched, or crimped from being bent over. Once you get it, you may as well pitch the baby, and pop a new seed.

 That's why we say to water around the stem, not directly on it. Your media will wick the moisture over to the roots/ stem. So you use cinnamon to prevent damping off from the moist media.