Shortening a conversation or a saved note to fit a limit. Compaction changes what the model receives next; it is not deletion, and it is not verification — a summary repeating a mistaken conclusion gives it another route into future requests.
Replacing “On October 3, the user suspected the contractor would miss Friday’s deadline; no updated schedule had been inspected” with “The contractor misses deadlines” saves space by losing the date, the attribution, and the uncertainty. More convenient, and less trustworthy.