DBCC CHECKIDENT Sets Identity to 0

You are right in what you write in the edit of your question.

After running DBCC CHECKIDENT('TableName', RESEED, 0):
- Newly created tables will start with identity 0
- Existing tables will continue with identity 1

The solution is in the script below, it's sort of a poor-mans-truncate :)

-- Remove all records from the Table
DELETE FROM TableName

-- Use sys.identity_columns to see if there was a last known identity value
-- for the Table. If there was one, the Table is not new and needs a reset
IF EXISTS (SELECT * FROM sys.identity_columns WHERE OBJECT_NAME(OBJECT_ID) = 'TableName' AND last_value IS NOT NULL) 
    DBCC CHECKIDENT (TableName, RESEED, 0);

As you pointed out in your question it is a documented behavior. I still find it strange though. I use to repopulate the test database and even though I do not rely on the values of identity fields it was a bit of annoying to have different values when populating the database for the first time from scratch and after removing all data and populating again.

A possible solution is to use truncate to clean the table instead of delete. But then you need to drop all the constraints and recreate them afterwards

In that way it always behaves as a newly created table and there is no need to call DBCC CHECKIDENT. The first identity value will be the one specified in the table definition and it will be the same no matter if you insert the data for the first time or for the N-th

It seems ridiculous that you can't set/reset an identity column with a single command to cover both cases of whether or not the table has had records inserted. I couldn't understand the behavior I was experiencing until I stumbled across this question on SO!

My solution (ugly but works) is to explicitly check the sys.identity_columns.last_value table (which tells you whether or not the table has had records inserted) and call the appropriate DBCC CHECKIDENT command in each case. It is as follows:

DECLARE @last_value INT = CONVERT(INT, (SELECT last_value FROM sys.identity_columns WHERE OBJECT_NAME(OBJECT_ID) = 'MyTable'));
IF @last_value IS NULL
    BEGIN
        -- Table newly created and no rows inserted yet; start the IDs off from 1
        DBCC CHECKIDENT ('MyTable', RESEED, 1);
    END
ELSE
    BEGIN
        -- Table has rows; ensure the IDs continue from the last ID used
        DECLARE @lastValUsed INT = (SELECT ISNULL(MAX(ID),0) FROM MyTable);
        DBCC CHECKIDENT ('MyTable', RESEED, @lastValUsed);
    END