Yes you are right.
By using this tag in server.xml you are eligible for hot deployment but it is not version specific.
The main reason to use this tag is when we are developing a web application we may have to change/modify in our source code. So this needs to be complied and we have to stop the
tomcat again restart.
So it seems like time taking and boaring. So we are using this context tag to dynamically take the modified class file, no need to stop the tomcat and restart.