The following error occurs during cut and trim: Shapes of this entity type are not allowed in this layer[].
The problem is that the SDE layer does not allow multipart shapes. If the entity mask on the layer is set to allow multipart shapes, the tool will perform as expected.
Esri Knowledgebase Info:
Error Message
When you append data to an existing SDE layer or when you load data containing multiple entity type features, you may receive the following error:
SDE Error (-35) Shapes of this entity type not allowed in this layer
Cause:
This error is caused by incompatible entity types between the source data and the SDE layer. For example, appending routes to a line feature class in SDE will cause this error message because the route feature class is of a different entity type than the line feature class.
This error is also caused by loading features containing multiple entity types into a new SDE feature class when only one of the entity types is specified with the -e option of the command syntax. An example of this would be loading coverage annotation containing both point and line entity types into SDE and only the point annotation is specified with '-e pA'. In this case, the point annotation will load properly, but the line annotation will be rejected and will produce the above error message.
Solution:
Use the correct entity type mask with the -e option when you load data.
Confirm that the entity type of the data being loaded is the same entity type of the SDE layer for which you are appending data.