I think the ACA 500 has some hack installed that allows it to expand your Chip memory, but don't quote me on this.
Yes, it performs a soft "hack" for 512k Chip RAM users that have the 1mb Agnus installed in their machines. Selecting that option in the Expert Menu of the ACA500 before startup enables the extra RAM available to go to Agnus for a total of 1MB Chip. The Menu will let you know if that feature is available or not for your machine.