%context isn't inherited

[chen-factual]

Example given by @potash: a.d %contexts b.d which %includes c.d which %includes d.d.

The intention of the %context feature is that from b.d onwards, pwd should refer to b.d's directory, i.e. both c.d and d.d are interpreted with b.d's context. However, current behavior is that c.d and d.d revert back to using a.d's context.