A number of agentic coding tools do this. Upon an initial request for a larger set of actions, it will write a markdown file with its "thoughts" on its plan to do something, and keep notes as it goes. They'll then automatically compact their contexts and re-read their notes to keep "focused" while still having a bit of insight on what it did previously and what the original ask was.

> rework their tools so they discard/add relevant context on the fly

That may be the foundation for an innovation step in model providers. But you can achieve a poor man’s simulation if you can determine, in retrospect, when a context was at peak for taking turns, and when it got too rigid, or too many tokens were spent, and then simply replay the context up until that point.

I don’t know if evaluating when a context is worth duplicating is a thing; it’s not deterministic, and it depends on enforcing a certain workflow.