[BUG] Compaction fails with "context window limit" error even when context usage is low (e.g., 20%) — regression in v2.1.153

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?

After updating from v2.1.140 to v2.1.153, automatic compaction no longer triggers. Manually running /compact fails with a context window limit error, even though the displayed context usage is only around 20%. This creates an unrecoverable dead-end where the
conversation cannot continue and /clear is the only way out, losing all progress.

What Should Happen?

• Automatic compaction should trigger during extended conversations, as it did in v2.1.140
• Compaction should succeed when context usage is low (20%)
• If compaction fails, there should be a fallback mechanism rather than leaving the session unrecoverable

Error Messages/Logs

Error: Error during compaction: API Error: The model has reached its context window limit.

  This error appears both when automatic compaction attempts to run and when manually executing /compact.

Steps to Reproduce

1. Today I Update Claude Code from v2.1.140 to v2.1.153
2. Start a conversation and work normally for an extended period
3. During normal usage, an error suddenly appears: API Error: The model has reached its context window limit.
4. Observe that automatic compaction never triggered on its own
5. Notice that context usage remains low (around 20%)
6. Manually run /compact → fails with the same error
7. Session is now unrecoverable — only /clear works

Claude Model

Other

Is this a regression?

Yes, this worked in a previous version

Last Working Version

2.1.140

Claude Code Version

2.1.153

Platform

Other

Operating System

macOS

Terminal/Shell

iTerm2

Additional Information

• This is a regression — compaction worked correctly in v2.1.140
• No large files were read during the session — context grew through normal conversation and tool usage
• The error message claims "context window limit" but usage is only ~20%, suggesting hidden context (system prompts, tool definitions, etc.) may be inflating the actual token count beyond what the usage indicator shows
• Claude Code CLI, macOS (Darwin 25.5.0)