The luma trap is explained in the AD725 data sheet.
Put simply, when color signals (chroma) were added to black and white (luma) television standards, the designers did it in such as a way that the new color signal would be backwards compatible with older black and white TVs. The signals are mixed together to form composite video. The problem is some of the signals can interfere with each other and the TV (which has to separate the combined signal) can't tell some times which part is chroma or luma. This causes an effect commonly known as dot crawl
The AD725 solution to this problem is to use a notch filter that "traps" the part of the luma signal that interferes with the chroma signal. If you use S-Video the luma and chroma are always kept separate and do not have this problem.
Another point is that all (?) modern TVs have filters on their composite inputs today that do the above (and more), so you might not notice much difference with the luma trap in place (but you might notice it on an older TV).