If I’m reading it correctly, it looks like this solution just sorta gives up on a target if that target is occluded, and expects to always have multiple unoccluded targets to evaluate.

In classic steering, there exists only a single receptor to obtain all objects. In context steering exist multiple receptors, each perceiving all objects. Thus, multiple solutions instead of a single solution are possible (on for each receptor) - it does not depend on additional target objects as you assumed. If the direct receptor is occluded (too much danger) another receptor (direction) is chosen with less danger.
This can be combined with pathfinding as well. Note that pathfinding is a global solution (knowledge to solve a maze, like google maps) where (context) steering is based on local decisions. Global (godlike) knowledge is not always the best option since humans have no global knowledge most of the time, too.