Like how all squares are rectangles, but not all rectangles are squares; prompt engineering is context engineering but context engineering also includes other optimisations that are not prompt engineering.

That all said, I don’t disagree with your overall point regarding the state of AI these days. The industry is full of so much smoke and mirrors these days that it’s really hard to separate the actual novel uses of “AI” vs the bullshit.

The other is that they intentionally forced LLMs to do the things we know are bad at (following algorithms, tasks that require more context that available, etc) without allowing them to solve it in a way they're optimized to do (write a code that implements the algorithm).

A cynical read is that the paper is the only AI achievement Apple has managed to do in the past few years.

(There is another: they managed not to lose MLX people to Meta)