Copilot Compacting conversation on 50%

Is it a bug? The context window is 4K, for GPT 5.4 but it works like Sonnet with a 1.9K context window. The conversation starts compacting at the same level. 
<img width="686" height="472" alt="Image" src="https://github.com/user-attachments/assets/182d56fd-eef1-4271-bea3-879db3915ec7" />