Contrast Matters: Understanding Robustness of In-Context Fine-Tuning to Target-Context Relatedness

In-context fine-tuning (IC-Train), training an LLM with labeled examples in-context, is increasingly used in place of standard fine-tuning for domain adaptation and continual absorption of labeled data. We study the robustness of the in-context learning ability that emerges from such training: does the fine-tuned model perform well across test inputs whose in-context examples range from unrelated to nearly identical? Across 32 configurations spanning four open-source LLMs and eight test sets over machine translation, Text-to-SQL, and multilingual semantic parsing, we show that robustness hinges on an overlooked design choice: how in-context examples are selected relative to the target during training. The two prevailing strategies turn out to be accurate over complementary parts of this spectrum: random contexts yield a model that gains little from related examples even when they are placed in its context, while retrieved similar contexts weaken accuracy on targets lacking close neighbors and raise the propensity to copy labels from context. Probes tracking in-weights learning, in-context learning, and copying trace these failures to distinct training dynamics, and show that introducing contrast in target-context similarity both within a context and across batches, restores robustness across the entire spectrum.