How to Fix Context Loss in Multi-Step AI Agent Workflows

I spent last weekend debugging an agent that kept forgetting what it was doing. It would happily call three tools in sequence, then on the fourth one. blank stare. Wrong arguments. Hallucinated file paths. The classic "who am I, where am I, what was I doing" moment. If you've built anything that chains together than a couple of tool calls, you've probably seen this. The agent starts strong, makes a plan, and then somewhere around step three or four it starts looking like it took a nap and woke up in someone else's session. Let's talk about why this happens and how to actually fix it.