I've tested this extensively in a workflow (not agentic) context, and you're right, the underlying models are both good at full rewrite of code files, and at doing search/replace.

They've been decent at full rewrite for 2 years. I don't think they were good at search/replace until a year ago, but I'm not so sure.

It's true that the models 2 years ago would sometimes make errors in whole rewrite - e.g removing comments was fairly common. But I've never seen one randomly remove one character or anything like that. These days they're really good.

Main reason agentic harnesses use search/replace is speed and cost, surely! Whole file output is expensive for small changes.