I'm honestly confused by the design of SWE-bench and why is considered reliable.

It's based on existing GitHub PRs and Issues, the full dataset is on HuggingFace and is one year old now. All frontier models 100% have those issues and PRs in their training data so obviously they are good at reproducing fixes for them when confronted with the same codebase and similar requests. Am I missing something? How is this considered the most reliable benchmark?

Frontier model developers do not consider SWE-bench to be reliable. OpenAI announced in February (https://openai.com/index/why-we-no-longer-evaluate-swe-bench...) that they consider it hopelessly contaminated, advocating for a new version SWE-bench Pro that was published more recently. (They seem to believe that even the publicly accessible part of the SWE-bench Pro problem set will be more resistant to training set contamination issues in the future, for reasons that to be honest I don't really understand.)