I originally thought that too, but as I mentioned in my first post, I can load external swf files that have the above code in them on the first frame. The external swf files also have symbols with AS Linkage names too. What seems to cause an issue though is when I try to "reach into" the external swf file and manipulate the symbols, using code like:
var AssetClass:Class = _loader.contentLoaderInfo.applicationDomain.getDefinition(id) as Class;
mc = new AssetClass();
That code works, but the app will lockup if I try and load it more than once. So apparently it's OK to have a certain amount of AS code in the external swf files, I am just trying to figure out what the "limit" is, because from my tests the statement "can contain no AS code" is false.