the expansion plug is meant to support the steer tube against the clamping force of the stem. to do that, it must be at least as long as the stack height of the stem clamp. besides that, it serves the same purpose as the star nut in an alloy steerer. there are is a hex socket in there that you use to tighten the plug in the tube.

install the plug -- it will be tight in the steerer. then install the spacers and stem, using carbon fixing paste on the stem clamp. preload the headset as usual with the stem cap, and tighten the stem clamp to spec.

you are running a pretty high stack of spacers. there will be a stress riser at the headset and at the stem bottom. 40mm is at the outside edge of the limits i have seen spec'd.

here is a specialized instruction that covers the finer points.

http://cdn.specialized.com/OA_MEDIA/...n_Guide_r2.pdf