Loaded Question: God doesn't lead astray to the extent a person can't be guided. Doesn't seal hearts so they cannot believe. This is just describing states they are currently in, and saying Mohammad (s) can't just magically change, but that the ball is in their court. There are some forever lost souls, but that's not what is being described.Question: If Allah leads people astray so they cannot be guided, sets a seal on people's hearts so they cannot believe, and creates many people for hell, how are they able to exercise free will in the matter of belief?
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It means whether he warns them or not, doesn't make them change, rather it's up to them. You have to know expressions are limited by other expressions and interpreted by other expressions.
God emphasizes to pray to him, soften one's heart, don't be stubborn to proofs and to believe in his light and the light of his Messengers (a). People can change their state of disbelief, this is why Quran says, if people cease their rebellion in disbelief and opposition, the past will be forgiven.