refactor: implement filterClaudeMdFromContext utility for context file handling

- Introduced a new utility function to filter out CLAUDE.md from context files when autoLoadClaudeMd is enabled, enhancing clarity and preventing duplication.
- Updated AgentService and AutoModeService to utilize the new filtering function, streamlining context file management.
- Improved documentation for the new utility, detailing its purpose and usage in context file handling.

apps/server/src/lib/settings-helpers.ts

@@ -1,8 +1,9 @@
 /**
- * Helper utilities for loading settings across different parts of the server
+ * Helper utilities for loading settings and context file handling across different parts of the server
  */
 
 import type { SettingsService } from '../services/settings-service.js';
+import type { ContextFilesResult, ContextFileInfo } from '@automaker/utils';
 
 /**
  * Get the autoLoadClaudeMd setting, with project settings taking precedence over global.
@@ -43,3 +44,67 @@ export async function getAutoLoadClaudeMdSetting(
     throw error;
   }
 }
+
+/**
+ * Filters out CLAUDE.md from context files when autoLoadClaudeMd is enabled
+ * and rebuilds the formatted prompt without it.
+ *
+ * When autoLoadClaudeMd is true, the SDK handles CLAUDE.md loading via settingSources,
+ * so we need to exclude it from the manual context loading to avoid duplication.
+ * Other context files (CODE_QUALITY.md, CONVENTIONS.md, etc.) are preserved.
+ *
+ * @param contextResult - Result from loadContextFiles
+ * @param autoLoadClaudeMd - Whether SDK auto-loading is enabled
+ * @returns Filtered context prompt (empty string if no non-CLAUDE.md files)
+ */
+export function filterClaudeMdFromContext(
+  contextResult: ContextFilesResult,
+  autoLoadClaudeMd: boolean
+): string {
+  // If autoLoadClaudeMd is disabled, return the original prompt unchanged
+  if (!autoLoadClaudeMd || contextResult.files.length === 0) {
+    return contextResult.formattedPrompt;
+  }
+
+  // Filter out CLAUDE.md (case-insensitive)
+  const nonClaudeFiles = contextResult.files.filter((f) => f.name.toLowerCase() !== 'claude.md');
+
+  // If all files were CLAUDE.md, return empty string
+  if (nonClaudeFiles.length === 0) {
+    return '';
+  }
+
+  // Rebuild prompt without CLAUDE.md using the same format as loadContextFiles
+  const formattedFiles = nonClaudeFiles.map((file) => formatContextFileEntry(file));
+
+  return `# Project Context Files
+
+The following context files provide project-specific rules, conventions, and guidelines.
+Each file serves a specific purpose - use the description to understand when to reference it.
+If you need more details about a context file, you can read the full file at the path provided.
+
+**IMPORTANT**: You MUST follow the rules and conventions specified in these files.
+- Follow ALL commands exactly as shown (e.g., if the project uses \`pnpm\`, NEVER use \`npm\` or \`npx\`)
+- Follow ALL coding conventions, commit message formats, and architectural patterns specified
+- Reference these rules before running ANY shell commands or making commits
+
+---
+
+${formattedFiles.join('\n\n---\n\n')}
+
+---
+
+**REMINDER**: Before taking any action, verify you are following the conventions specified above.
+`;
+}
+
+/**
+ * Format a single context file entry for the prompt
+ * (Matches the format used in @automaker/utils/context-loader.ts)
+ */
+function formatContextFileEntry(file: ContextFileInfo): string {
+  const header = `## ${file.name}`;
+  const pathInfo = `**Path:** \`${file.path}\``;
+  const descriptionInfo = file.description ? `\n**Purpose:** ${file.description}` : '';
+  return `${header}\n${pathInfo}${descriptionInfo}\n\n${file.content}`;
+}