The key insight is that the AGENTS.md becomes a kind of "engineering culture in a file". When you onboard a human engineer, you hope they absorb the team's values over time. With AI, you can encode those values upfront.
The challenge is that principles need to be specific enough to be actionable. "Write simple code" is too vague. "Avoid single-use wrapper functions" (from the sibling comment) is better - it's enforceable.