You still need to define assumptions somehow. What you want and what the model wants will not match up by default.

do you just manually type out your important instructions every time instead of being smart and putting a few lines in a text file?

this is probably outdated, attention typically stays fine up to ~200k tokens these days

you end up clouding that more with an agent having to re-understand concepts or conventions

AGENTS.md is good when it is a nested sparknotes for the project, you save context and turns overall, but keep them minimal and largely gotchyas or unusual workflows in your repo