Context is the bottleneck for coding agents now

There's a misunderstanding here broadly. Context could be infinite, but the real bottleneck is understanding intent late in a multi-step operation. A human can effectively discard or disregard prior information as the narrow window of focus moves to a new task, LLMs seem incredibly bad at this.

Having more context, but leaving open an inability to effectively focus on the latest task is the real problem.

Humans have a very strong tendency (and have made tremendous collective efforts) to compress context. I'm not a neuroscientist but I believe it's called "chunk."

Language itself is a highly compressed form of compressed context. Like when you read "hoist with one's own petard" you don't just think about literal petard but the context behind this phrase.