It doesn't make sense to ask if a definition is true. A definition assigns a meaning to a term or a notation. This definition assigns a meaning to the notation tr A. The author proves that if tr A is defined by (A.5.37), then tr A=Aii. I don't understand your concern about using the fact that he used the basis vectors instead of arbitrary vectors in the proof he did. The definition is a "for all" statement. If the equality holds for all u,v,w, then it holds for i1, i2
, i3.
However, it makes sense to be concerned about whether the definition makes sense at all. What he should have proved (preferably before the definition), but didn't, is that there's a unique real number r such that ##r\mathbf{u} \cdot(\mathbf{v}\times\mathbf{w}) = (\mathbf{Au})\cdot(\mathbf{v}\times\mathbf{w}) +\cdots## for all ##\mathbf{u},\mathbf{v},\mathbf{w}\in\mathbb R^3##. Then it makes sense to define tr A to be that number.
Alternatively, and equivalently, he could have proved that if tr A is defined by tr A=Aii, then ##(\operatorname{tr} \mathbf{A})\mathbf{u} \cdot(\mathbf{v}\times\mathbf{w}) = (\mathbf{Au})\cdot(\mathbf{v}\times\mathbf{w}) +\cdots## for all ##\mathbf{u},\mathbf{v},\mathbf{w}\in\mathbb R^3##. It appears that what he did prove tells us that if tr A=Aii, then ##(\operatorname{tr} \mathbf{A})\mathbf{i}_1 \cdot(\mathbf{i}_2\times\mathbf{i}_3) = (\mathbf{A i}_1)\cdot(\mathbf{i}_2\times\mathbf{i}_3) +\cdots##
I'm saying "appears" because I'm having some trouble understanding his definitions. Obviously, it's at least partially because I haven't read them all. Is V=ℝ3? First he says that A is an endomorphism of V. (At least I think that's what he says). Then he says that ##\mathbf{A}=A_{kj}\mathbf{i}_k\otimes\mathbf{i}_j##, something I would interpret as a function from V×V into ℝ, not from V into V. But I suppose he may have defined ##\mathbf{i}_k\otimes\mathbf{i}_j## as the map that takes ##\mathbf u## to ##(\mathbf{i}_k\mathbf{u})\mathbf{i}_j##, where ##\mathbf{i}_k## is interpreted as a cotangent vector and ##\mathbf{i}_j## as a tangent vector. This would mean that ##(\mathbf{i}_k\otimes\mathbf{i}_j)(\mathbf u)=u_3\mathbf{i}_j##, and that ##\mathbf{Ai}_1=A_{kj}(\mathbf{i}_k \mathbf{i}_1)\mathbf{i}_j=A_{kj}\delta_{k1}\mathbf{i}_j=A_{1j}\mathbf{i}_j##. Uh, that's not the result he's getting. However, if I instead guess that ##\mathbf{i}_k\otimes\mathbf{i}_j## is the map that takes ##\mathbf u## to ##(\mathbf{i}_j\mathbf u)\mathbf{i}_k##, I get the result he does. Is that really how he defines ##\otimes##?
If you want us to help you figure this out, you need to first figure out what the definitions are, and then show us an attempt to use them to prove what you need to prove. I'm assuming that what you need to prove is that if tr A=Aii, then tr A satisfies (A.5.37).
By the way, I don't see how to prove that (A.5.37) follows from the simpler definition of the trace. I'm actually having a hard time believing that it can be true.