The trace goes back fine, that's not the issue.

The issue is that if they send the full trace back, it will have to be processed from the start if the cache expired, and doing that will cause a huge one-time hit against your token limit if the session has grown large.

So what Boris talked about is stripping things out of the trace that goes back to regenerate the session if the cache expires. Doing this would help avert burning up the token limit, but it is technically a different conversation, so if CC chooses poorly on stripping parts of the context then it would lead to Claude getting all scatter-brained.