[kitlangton]

Summary

Audit-driven simplification of the V2 system context subsystem (SystemContext algebra + SessionContextEpoch persistence). The durable design is unchanged — stable baseline in the system prompt, drift narrated as chronological system messages, seq-based folding — but the implementation now follows one invariant and one mental model:

The Applied record is what the model was last told. Reconcile never rewrites the baseline; only completed compaction rebaselines, and move/committed-revert resets the checkpoint.

Changes

Algebra (system-context/index.ts)

• ReconcileResult narrows to Unchanged | Updated; reconcile can no longer escalate to a full replacement
• Undecodable stored values are treated as new sources (baseline re-announced as an update) instead of forcing a re-baseline
• Sources removed without removal text silently retain the model's belief; entries self-clean at the next rebaseline
• rebaseline (formerly replace) restates unobservable sources from their last-applied values instead of blocking; ReplacementReady/ReplacementBlocked are deleted. Only a session's first initialize still blocks on unavailability
• Renames: Snapshot → Applied, Generation → Baseline { text, applied }

Checkpoint (session/context-checkpoint.ts, formerly context-epoch.ts)

• One prepare entry point per turn, called before input promotion; the initialize/prepare two-step and its redundant queries are gone
• Corrupt stored applied records self-heal (treated as empty → everything re-announces); ContextSnapshotDecodeError is deleted from RunError
• Context update messages now precede the promoted user message, matching their actual chronology

Registry deleted

• Builtins and instruction context become ordinary Location-scoped load() services; the runner composes all six producers explicitly in loadSystemContext. Dynamic registration/deregistration had no consumers

Fixes

• Forks now copy the parent's checkpoint row. Previously copied messages kept parent seqs while the fork initialized a near-zero baseline_seq, so nothing folded: forks got a fresh full baseline plus every stale context-update message, and copied compaction rows triggered a spurious rebaseline
• Committed-revert checkpoint reset now has test coverage
• Dead SessionStore.runnerContext / SessionHistory.loadForRunner removed

Feature: delta updates

• Skill, reference, and MCP guidance render pure additions ("new skills are available…") and pure removals ("no longer available and must not be used: …") as small deltas instead of restating the full list on every change; description/instruction edits still restate the superseding list

Compatibility

No migration and no SDK regen: the SQL table (session_context_epoch), its column names, and the session.next.context.updated wire event are unchanged.

Testing

• packages/core: full suite green (the 6 Watcher failures reproduce identically on unmodified v2 under load and pass in isolation)
• bun typecheck clean in core, server, cli, sdk-next

Follow-up

Planned separately:

• chore(core): review V2 table and durable event type names before GA #34922 — review V2 table/event names before GA; the deferred session_context_epoch → session_context_checkpoint table rename lives there
• feat(core): API-managed per-session context entries #34918 — API-managed per-session context entries