I came up on this problem during my first season. Mike Lowell was released, which I think is a problem unto itself but that's a different story, during the season into the FA pool without being put on waivers. I first try to sign him to a minor league contract to which he refuses so I sign him to a major league contract for one year. I look on my roster and find that he was put on my AAA team and was not put on the 40 man roster. I decide to put him into the AAA lineup and leave him there to see what would happen for a couple of days. It lets me do this without any problems. Obviously the problem was that you cannot sign someone to a major league contract and then he gets placed on the AAA roster without being put on the 40 man roster. I then get a trade offer where I would get Matt Clement for Lowell. Same thing happens to Clement where he gets put in AAA and not put on the 40 man roster.
Speaking of trades, I have the trade setting at difficult and the AI favor prospects but was still able to trade Glendon Rusch for B.J. Upton and Wes Bankston. Of course this was Chuck LaMar doing the trade so I guess this could actually happen in real life.