I think I could figure out the reason of this problem. Actually emergency stretch is broken in all cases it seems. In luatex source code I see:

source/texk/web2c/luatexdir/tex/commands.w:    primitive_tex("emergencystretch",
 assign_dimen_cmd, dimen_base + emergency_stretch_code, dimen_base);

source/texk/web2c/luatexdir/tex/equivalents.h:#define emergency_stretch_par
         glue_par(emergency_stretch_code)

source/texk/web2c/luatexdir/tex/equivalents.h:#  define glue_par(A)  equiv(glue_base+(A))

I could be wrong but to me it seems we assign some value to emergency stretch “variable” setting using “emergencystretch” command and we use another via emergency_stretch_par.

Unfortunately I am not able to build luatex locally on Windows Platform, only sync code from SVN repository.

Thanks a lot,

Joseph Canedo

From: schuster.wolfgang@gmail.com
Sent: ‎Tuesday‎, ‎July‎ ‎19‎, ‎2016 ‎12‎:‎10‎ ‎AM
To: ntg-context@ntg.nl

18. Juli 2016 um 23:21
Dear all,

In some cases specifying \setupalign[stretch] does not seem to have any effect with latest betas (live, 2016.06.20 22:14 version are fine, but 2016.07.18 is not), and the output has now overfulls instead of (admitedly a bit large) underfulls.

Attached  simple (albeit bit extreme) MWE. Sorry for the relatively large MWE but could not figure out how to make it shorter.

emergency_stretch.pdf produced with latest beta (updated with first-setup.bat today).
emergency_stretch_ok.pdf produced with 2016.06.20 22:14 version.
I can’t reproduce your problem but justified text isn’t the best option in narrow columns.

Below is a simplified version of your code which doesn’t use the parent setting from margindata and marginframed setups, there is also no need to set the alignment twice and marginframed has no method key (the source is wrong).

\definemargindata
  [InOuter]
  [method=first,
   location=outer,
   margin=margin,
   width=\outermarginwidth,
   style=\tf,
   stack=continue,
   align={normal,hanging,morehyphenation,hz,verytolerant,stretch}]

\definemargindata
  [InInner]
  [method=first,
   location=inner,
   margin=margin,
   width=\innermarginwidth,
   style=\tf,
   align=outer]

\definemarginframed[InOuter]
\definemarginframed[InInner]

%\setuplayout[width=12cm,rightmargin=4cm]

\starttext

Foo \InOuter{\input knuth } Bar.

\stoptext

Wolfgang