Hibernate does not seem to trim any possible whitespace from the value of the hibernate.hbm2ddl.auto property when parsing.
For example, an accidentally mis-configured value of "update " (with whitespace at the end) is not recognized as a valid option. This results in Hibernate quietly ignoring what seems to be, at first glance, a valid value for the property.
Considering how easy it can be to accidentally add whitespace to the end of a plaintext file (such as a .properties file format), I think it would make sense for ease of use if these values were trimmed of whitespace before being interpreted.
Hibernate version 3.5.4-Final, PostgreSQL dialect
I'd rather not try to handle incorrect values dynamically, even if trim is simple. Instead, logs a warning if an un-expected value is found.