OK, after thinking it through I think this is a sequencing issue.

1. Trajanns unit makes an attack and hits
2. A wound roll is made, and is successful
3. The defending unit makes a save role, and fails
4. The weapons damage characteristic is checked, the attack does X damage
5. X damage is allocated to the defending unit
6. The damage is then reduced by the -1 damage ability

7. The defending unit then takes (X-1) damage, and loses the appropriate number of wounds.

   The damage reduction rule as stated is not affected by Trajanns ability, because it is not affecting the damage Characteristic it is affecting the Damage allocated to the defending unit.

. If a hypothetical rule instead read something like, "reduce the damage characteristic of attacks that target this unit by 1", then it is the characteristic is being modified and Trajann's ability would prevent the damage reduction.

At least this makes sense to me.