The method for disabling TRACE requests works by changing the content-length of the TRACE request that's been received into an invalid one, which appears to result in the HTTP 413 error you are seeing.
Ideally you'd like to see a 501 Not Implemented, but the 413 is probably a consequence of the web/http engine that AS 7.x uses not honouring/accepting the error definition in that directive.
In any case, the HTTP Trace request is blocked and not processed, closing that security vulnerability.
If you have a support contract you can view this:
http://sunsolve.sun.com/search/document.do?assetkey=1-9-70245-1
While this is for WS 4.1/6.0, AS 7.x borrows the web server's code for its http engine, so if a 413 is expected for that product, it is likewise expected for AS 7.x.
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