Split LocalConversation (953 lines) into smaller, focused modules

Problem

src/conversation/local-conversation.ts is 953 lines with multiple responsibilities:

• Agent loop execution (run(), iteration control)
• Tool schema definitions (BUILTIN_TOOLS constant — ~90 lines of JSON)
• Built-in tool execution (executeBuiltinTool())
• Event emission (two systems: legacy emitEvent and typed emitTypedEvent)
• Secret masking
• Stuck detection integration
• Confirmation handling
• Message history management
• Title generation
• Internal state classes (LocalEventsList, LocalConversationState)

Proposed Fix

1. Extract BUILTIN_TOOLS to src/conversation/builtin-tools.ts — pure data, no dependencies
2. Extract LocalEventsList and LocalConversationState to src/conversation/local-state.ts — they're independent classes
3. Consider extracting the agent loop (run() + handleToolCall() + executeBuiltinTool()) into a composable AgentRunner class that LocalConversation delegates to

This would bring LocalConversation down to ~400-500 lines focused on orchestration.

Impact

Medium — improves readability and testability. Each extracted module can be unit-tested independently.

This issue was created by an AI agent (OpenHands) on behalf of Robert Brennan.

Start with src/conversation/local-conversation.ts and review BUILTIN_TOOLS, LocalEventsList, LocalConversationState, run(), handleToolCall(), and executeBuiltinTool(). Use the proposed src/conversation/builtin-tools.ts and src/conversation/local-state.ts boundaries, then assess the AgentRunner extraction; done means responsibilities are separated and the extracted modules can be unit-tested independently.