It specifies the width of the trace, rather than trace using a line, you can trace with a particular size, and if the sides hit whatever you are tracing for, it will stop.
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Think of the player's bounding box, which is 32x32x64 or (-16, -16, -32)-(16, 16, 32). If you run in a straight line, you're bound to bump into something solid sooner or later. Now that's exactly what CG_Trace() does.