Dont know much about this sort of detail but are you suggesting at 500 metres deep the bottom is still effecting the sea state? If that is the case at what depth does it have no effect? or I guess that depends on a whole heap of factors.
There is no science to it (that I'm aware of) and almost the opposite, oceanographers have tried to study it and can't determine the key factors. BUT, its known to happen, fairly much as John B says.
The best known example is the Bay of Biscay, being notorious for bad sea state as the big Atlantic swells roll in and steepen up as they approach the continental shelf during classic Atlantic storms. The other moderately well documented spot is the Labadi Bank (spelling) in the Celtic Sea, from the 79 Fastnet race. Its a spot on the rhumb line from Fastnet rock to the Isles of Scilly, where it shallows up a little bit. Known as being an area with sharper / steeper waves, but physicists etc cant determine how the bottom has an effect there. (refer the book Fastnet Force 10, for details on that, I've got a copy but can't be bothered finding the page reference, give me a shout if you are interested, its got a good discussion of bottom depth on wave shape and how it impacted certain boats in the 79 Fastnet).
From my basic understanding of physics, if you have a deep low such as was this storm, pushing a lot of water infront of it, and a big swell set up over 1,000's of nm, and then it comes up hard against a coast line (and shelving bottom), the energy / waves don't have anywhere to go, and steepen up. My assumption is, if the storm is big enough / the fetch long enough, you will get an effect much further out than is initially logical.
Or to put another way, old mariners are always wary when they 'come into soundings' or when the bottom shallows up from open ocean.
Either way, the swell in the rescue video looked frightful, and I can only imagine how traumatised the survivors are, both from having their boat sink, and for ending up in that water.