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File-level bug localization is especially critical in hierarchical pipelines, where errors can propagate to downstream stages such as statement-level localization or patch generation. While Retrieval-Augmented Generation (RAG) offers a promising direction for grounding LLMs in repository context, existing RAG pipelines rely on static retrieval and lack the reasoning needed to identify faulty code accurately. 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While Retrieval-Augmented Generation (RAG) offers a promising direction for grounding LLMs in repository context, existing RAG pipelines rely on static retrieval and lack the reasoning needed to identify faulty code accurately. 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