Neither one interprets the sequence, but cat will print the file unfiltered to stdout, and stdout is processed by your terminal, and then the terminal will interpret it. less filters before printing to the terminal.
I meant that "echo -e" transforms the four characters "\033" into a single byte, for example. Thus, the sequence is "interpreted" by echo. Then, the cat program just copies the bytes without looking at them. If you want "cat" to escape these bytes so that they are not seen by the terminal you can use the "-v" option.
