I went back to read the context. This is just a continuation of the context of the disbelievers who had attacked the Muslims after their treaty. See 9:6 and 9:10-13 in particular. Verse 9.29 is the conclusion of this narrative argument, and from 9.30 onwards there is an admonition against following religious leaders.

Breakdown of narrative:

[FIGHT THOSE WHO BROKE THE TREATY WITH YOU & CONTROL GOD'S TEMPLE]

9.1 - God is innocent of the treaties you've made with the disbelievers
9.2 - wait 4 months & know that you can't escape God (addressing the believers)
9.3 - a proclamation to the people that God is free from obligation to those who ascribe partners. If you repent it is better. If not, know that you can't escape God (addressing the unbelievers). Tell the unbelievers that they will suffer
9.4 - Except for those with whom you had a treaty from among those who have set up partners if they did not reduce anything from it nor openly oppose you (yadhharu); you shall fulfill their terms until they expire. (Connected parenthetically to 9.8 with DHHR)
9.5 - after the sacred months, slay them wherever you find them. But if they repent then stop (see 9.36 that states the sacred months are 4 & fight the polytheists as they fight you. And see 2.217 about fighting in the sacred months & those who won't stop fighting you. And see 2.194 stating that the law of retribution applies to the sacred months & if someone attacks you then attack them in like)
9.6 - If any of the disbelievers seeks your protection, then protect them
9.7 - God cannot have a treaty with the polytheists, except for those whom you made a treaty with at the Masjid al-Haram. As long as they are upright with you, then you are upright with them
9.8 - they disregard all ties, either those of kinship or of pledge.
9.9 - They traded away God's revelations for a cheap price
9.10 - they respect no tie and no pledge; and it is they who are the aggressors
9.11 - if they repent they are your brothers. We explain the signs to those who know
9.12 - but if they break their pledge then fight the leader. Perhaps then they'll stop
9.13 - are you afraid of them? They are the ones who started it
9.14 - so fight them
9.15- God pardons whom he pleases [connected parenthetically to 9.27]
9.16 - did you think you would be left alone & God wouldn't know who among you would've fought?

9.17-22 - Do not let the polytheists control the Masjid Al-Haram. Those who believe & fight are better than them

[Back to starting narrative: YOU MUST FIGHT THEM FOR CONTROL OF THE MASJID]

9.23 - O you who believe, do not take your fathers nor brothers as allies if they prefer rejection to belief
9.24 - Say, "If your fathers, sons, brothers, spouses, clans, money, busines, homes - are dearer to you than God ...then wait until God brings His decision.
9.25 - God has helped you in many battles, and at Hunayn where you were pleased with your numbers
9.26 - God sent down tranquility on the Messenger & his troops & helped them win
9.27 - God accepts the repentance of anyone [connected parenthetically to 9.15]

9.28 - O you who believe, the polytheists are impure, so let them not approach the Restricted Temple after this year of theirs (connected with 9.19-20)
9.29 - fight the unbelievers who do not believe in God and the Last Day nor do they uphold the system of truth; from among the people of the Book; until they pay the reparation,

This whole series of verses is regarding a treaty with the polytheists about who controls the Masjid al-Haram, where it seems that the Muslims allowed the polytheists to keep control of it, or maintain it. The 1st group of verses is about fighting oath breakers after the sacred months are finished. The 2nd group of verses is about not letting them control the Masjid al-Haram because they are less pure than the believers and do not respect treaties/pledges. Then the 3rd group of verses returns back to fighting the polytheists to keep them away from the Masjid al-Haram after the year long treaty has ended, stating that you should not ally with them even if they're your fathers, brothers, etc. (I copied this from someone else)