That should work - a DGNLIB is just a DGN file with a different extension in the proper location for use as a DGNLIB. Move one into another folder and it is hard to tell its a DGNLIB. I'm not sure that there is a good reason to do that, however.
What's nice about DGNLIB's is that you can have minimal seed files and by attaching different DGNLIB's have totally different environments.