Document ETag implementation and limitations

- Add concise documentation explaining current ETag implementation
- Document that we use simple equality check, not full RFC 7232
- Clarify this works for our browser-to-API use case
- Note limitations for future CDN/proxy support

Addresses Code Rabbit feedback about RFC compliance by documenting
the known limitations of our simplified implementation.

🤖 Generated with Claude Code

Co-Authored-By: Claude <noreply@anthropic.com>

PRPs/ai_docs/ETAG_IMPLEMENTATION.md

@@ -0,0 +1,39 @@
+# ETag Implementation
+
+## Current Implementation
+
+Our ETag implementation provides efficient HTTP caching for polling endpoints to reduce bandwidth usage.
+
+### What It Does
+- **Generates ETags**: Creates MD5 hashes of JSON response data
+- **Checks ETags**: Simple string equality comparison between client's `If-None-Match` header and current data's ETag
+- **Returns 304**: When ETags match, returns `304 Not Modified` with no body (saves bandwidth)
+
+### How It Works
+1. Server generates ETag from response data using MD5 hash
+2. Client sends previous ETag in `If-None-Match` header
+3. Server compares ETags:
+   - **Match**: Returns 304 (no body)
+   - **No match**: Returns 200 with new data and new ETag
+
+### Example
+```python
+# Server generates: ETag: "a3c2f1e4b5d6789"
+# Client sends: If-None-Match: "a3c2f1e4b5d6789"
+# Server returns: 304 Not Modified (no body)
+```
+
+## Limitations
+
+Our implementation is simplified and doesn't support full RFC 7232 features:
+- ❌ Wildcard (`*`) matching
+- ❌ Multiple ETags (`"etag1", "etag2"`)
+- ❌ Weak validators (`W/"etag"`)
+- ✅ Single ETag comparison only
+
+This works perfectly for our browser-to-API polling use case but may need enhancement for CDN/proxy support.
+
+## Files
+- Implementation: `python/src/server/utils/etag_utils.py`
+- Tests: `python/tests/server/utils/test_etag_utils.py`
+- Used in: Progress API, Projects API polling endpoints