The strace utility is part of the Android Open Source Project (AOSP) code base. The project path as declared in the manifest is external/strace.
I downloaded Android 2.3 as well as the regular strace source code which is hosted on sourceforge.
The entire strace source code on SourceForge was forked and ported over to Android's code base. (But it seems like some OS-specific components are missing which makes sense since Android doesn't use them anyway.)
A quick look at the Android code base for external/strace shows that the version is 4.5.12 while the latest on SourceForge as at the time of this writing, is 4.6. Well at first glance the version difference is not that great, but hey, the times of release between those two versions are almost 6 years apart (2005 vs 2011)!
I wanted to check whether the strace utility in the latest version of Android, which is 4.0, has been upgraded. So this time round I downloaded the Android 4.0 source code, and did a quick diff with Android 2.3 source code. The result is disappointing -- the entire external/strace directory was unmodified, which means that nobody bothered porting over the bug fixes since 2005. In fact I suspect since the start of the Android project, no one ported over the changes.