fix(chat): add distill_transcript (was called but never defined)

handle_dharma_room_turn and handle_dharma_chat both called
distill_transcript since June 30 but the function was never declared,
causing a build failure. Implements last-3-messages extraction for JSON
array transcripts and last-500-char truncation for plain text.

chat.el

@@ -594,6 +594,44 @@ fn engram_compile(intent: String) -> String {
     if str_starts_with(ctx, "[") { return truncated + "]" }
     return truncated
 }
+// distill_transcript — extract the salient tail from a full conversation transcript.
+//
+// Purpose: before activating working memory on a transcript, reduce it to the
+// last N turns. Activating on the ENTIRE transcript (which may contain hundreds
+// of messages) would produce noisy, over-broad seed finding — too many nodes match
+// too many words, collapse the WM to breakthrough-floor nodes. Taking only the tail
+// focuses activation on what's contextually live right now.
+//
+// Handles two transcript formats:
+//   JSON array: [{"role":"human","content":"..."},...]  → extract last 3 messages' content
+//   Plain text: raw string                              → return last 500 chars
+//
+// Returns a string of at most 500 chars suitable for engram_compile/engram_activate.
+// (Added 2026-07-01 self-review: was called in handle_dharma_room_turn and
+// handle_dharma_chat but never defined — caused build failure since June 30.)
+fn distill_transcript(transcript: String) -> String {
+    if str_eq(transcript, "") { return "" }
+    // JSON array format: extract last 3 messages' content fields
+    if str_starts_with(transcript, "[") {
+        let n: Int = json_array_len(transcript)
+        if n == 0 { return "" }
+        let m0: String = json_array_get(transcript, n - 1)
+        let m1: String = if n > 1 { json_array_get(transcript, n - 2) } else { "" }
+        let m2: String = if n > 2 { json_array_get(transcript, n - 3) } else { "" }
+        let c0: String = json_get(m0, "content")
+        let c1: String = json_get(m1, "content")
+        let c2: String = json_get(m2, "content")
+        let combined: String = c2 + " " + c1 + " " + c0
+        let len: Int = str_len(combined)
+        if len > 500 { return str_slice(combined, len - 500, len) }
+        return combined
+    }
+    // Plain text: return last 500 chars
+    let len: Int = str_len(transcript)
+    if len > 500 { return str_slice(transcript, len - 500, len) }
+    return transcript
+}
+
 fn json_safe(s: String) -> String {
     let s1: String = str_replace(s, "\\", "\\\\")
     let s2: String = str_replace(s1, "\"", "\\\"")