Releasing vassals hasn't reduced AE in EU4 for a long time. As far as I know that hasn't changed in AoW.
It has reduced AE, just not in a way that's intuitive. It has to do with the game saving x number of modifiers of that nation's opinion, and if the AE is one of the modifiers that is outside of that number of modifiers, then it doesn't get saved when that nation is annexed.
There was a thread DDRJake posted asking about this awhile back, and a lot of testing went into figuring it out.