[BUG] Instant auto-compaction not instant - compaction takes same time as before v2.0.64

Preflight Checklist

• [x] I have searched existing issues and this hasn't been reported yet
• [x] This is a single bug report (please file separate reports for different bugs)
• [x] I am using the latest version of Claude Code

What's Wrong?

Version 2.0.64 changelog states "Made auto-compacting instant", but the compaction step/process still takes the same amount of time as before. Currently on v2.0.65 and the issue persists.

When auto-compaction triggers (or when using /compact manually), the process duration is identical to pre-2.0.64 versions - there's no observable improvement in how quickly compaction completes. The feature advertised as "instant"
has no noticeable performance difference.

What Should Happen?

Per the v2.0.64 changelog: "Made auto-compacting instant"

The compaction process should complete significantly faster (ideally instantly or near-instantly) compared to previous versions where it would take noticeable time to process and summarize the conversation context.

Error Messages/Logs

No error messages - the feature just doesn't behave as advertised.
  Compaction completes successfully but takes the same duration as pre-2.0.64 versions.

Steps to Reproduce

1. Use Claude Code v2.0.64 or later (tested on v2.0.65)
2. Start a conversation and accumulate context until it reaches ~80% or triggers auto-compaction warning
3. Either wait for auto-compaction to trigger OR run /compact manually
4. Observe that the compaction process takes the same amount of time as it did in previous versions
5. Expected: "Instant" compaction as per changelog
6. Actual: Same duration as before the "instant" feature was introduced

Claude Model

Opus

Is this a regression?

No, this never worked

Last Working Version

_No response_

Claude Code Version

2.0.65 (Claude Code)

Platform

Anthropic API

Operating System

Windows

Terminal/Shell

PowerShell

Additional Information

• The v2.0.64 changelog explicitly states "Made auto-compacting instant" as a feature
• Issue persists in v2.0.65, suggesting the "instant" optimization is either not active or has a bug