The hierarchy of display contexts determines where the graphics proxy looks for a display context if it does not find it in the customizing bundle assigned to the port. If a display context is used in several customizing bundles it is more efficient to assign it once to a port higher up the hierarchy where it can be used by all of the customizing bundles instead of assigning it to each of the individual customizing bundles.
The whole customizing object is assigned to the port. The display contexts are attributes of the customizing object. Context 1 and context 3 are inside the customizing object. Context 2, however, is assigned to a port further up the hierarchy of ports.
The graphics proxy looks for context 2 in the customizing object (as a substructure). When it does not find it there it looks for it at the same port but not at the substructure level. The graphics proxy searches up the hierarchy of ports until it finds context 2.