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Unless something has changed recently (I haven't checked the latest code), this config gets passed all the way to the jastow project and gets handled in this class jastow/JspRuntimeContext.java at master · undertow-io/jastow · GitHub
That is correct, and main method there is handleFileChange https://github.com/undertow-io/jastow/blob/master/src/main/java/org/apache/jasper/compiler/JspRuntimeContext.java#L626
which is triggered by filesystem watch service.
Thank you so much, fellas. That was very helpful. It is what I suspected, since I saw my test.jsp was last touched 9/8, but then I added a sysout to it, and then it recompiled on 9/11. I figured, at most it was doing a last modified check, which would've been a negligible performance hit at best. But this is the best case scenario, where it has a listener for the file changes.