So my prop_tractor_beam is too big to fit in my 128 square and the property "use 128 model" appears to be broken because it won't do anything. My question should be self explanatory.

It does something, you just don't see it in Hammer. There was a modified FGD kicking around here a while ago that added a "128 model for Hammer" property so you could see what it would look like, but I don't know where that's gone...

Here's that snippet, at any rate. Replace the tractor beam info in portal2.fgd with this.

@PointClass base(Targetname, Parentname, Angles, BaseProjector, Reflection, Shadow) studio() = prop_tractor_beam : "Emitter for a tractor beam."
[
   linearForce(float) : "Linear Force" : 250 : "Linear force to apply to objects in the beam."
   noemitterparticles(boolean) : "Disable Emitter Particles" : 0 : "Disable the whirly particles on the emitter."
   input SetLinearForce(float) : "Set the linear force applied to objects in the beam."
   use128model(boolean) : "Use 128 model" : 0 : "Use the tbeam projector model that fits within a 128 unit square."
   model(choices) : "Hammer 128 Model" : 0 : "The model to show in Hammer." =
   [   "models/props/tractor_beam_emitter.mdl" : "Normal"
      "models/props_ingame/tractor_beam_128.mdl" : "128x128"   ]
]

Thanks Felix.