Yeah, you really can't reduce without the AI starting to "thrash" the roster.
In past years when the Active roster was 25, the game AI had fits trying to meet the rules w/o constantly thrashing the roster. It was frustrating to say the least.
In fact, some players like increasing the 40-man or active rosters to give the AI some "room" before freaking out about meeting needs and who to keep, etc.
Not to be pushy, but your experience above is a warning that the game won't react well to reduction of the 40-man. I have never found it worthwhile.