At Wolfgang’s request, a new thread for this subject. I have cleaned up 
the example from the July 5 posting, but the problems are the same as 
shown there. In July Alan suggested that there might a bug here, but 
nothing has been done to address it since then. Wolfgang suggested 
(http://www.mail-archive.com/ntg-context%40ntg.nl/msg35580.html) that 
method=font is required for proper protrusion handling for quotations.

 1. When \setupdelimitedtext[quotation][method=font] is present /and
    //there is //no citation//in a footnote within a startquotation
    block and a bibliography is produced/, compilation proceeds normally.
 2. When \setupdelimitedtext[quotation][method=font] is present /and
    //there is a citation//in a footnote within a startquotation block
    and a bibliography is produced,/ the compilation complains of a
    missing right curly. When allowed to continue to completion the
    protrusion for the opening quotation marks does not match the
    protrusion for similar marks not produced through \startquotation.
    Citations in footnotes outside quotation blocks are not a problem.
    Without a bibliography (\placelistofpublications)
 3. When \setupdelimitedtext[quotation][method=font] is present, the
    [right] option of \startblockquotation is treated as text within the
    quotation. This can be resolved by adding “leftmargin=” to the
    \setupdelimitedtext[quotation] command (but that complicates matters
    when you want other alignments). Similarly, the [left] and [middle]
    options are ignored as options and appear as text.
 4. When “method=font” is not present, protrusion for block quotations
    (\startblockquotation … \stopblockquotation) is greater than and not
    aligned with other protrusion.
 5. When “method=font” is not present, protrusion for non-block
    quotations (\quotation{…}) is not done at all.
 6. With the older bibliography system, footnotes in citations in
    quotation blocks do not cause a halt in compilation.
 7. With the older bibliography system, item 3 is still a problem, that
    is, method=font appears to be inimical to the left, right, and
    middle options for \startblockquotation without regard to the
    bibliography system in use.


\showframe

\definefontfeature [default][protrusion=quality]
\setupalign        [hz,hanging]

% The next line should allow \startquotation to protrude quotes properly
\setupdelimitedtext[quotation][method=font]

%==================
% For testing with old regime, enable next and disable following
%\setupbibtex[database=sample.bib] % requires sample.bib in current 
directory
%------------------
% For testing with new regime, disable above and enable following
\definebtxdataset  [sample] % finds and uses distribution sample.bib
\usebtxdataset     [sample.bib]
%==================

\starttext
\startparagraph
   There is a citation in the footnote to this standard 
paragraph\footnote{This footnote has a citation \cite[Eijkhout1991].}
\stopparagraph

\startparagraph
\startquotation[right]
   There is a citation in the footnote to this block 
quotation\footnote{This footnote has a citation \cite[hh2010a].}
\stopquotation
\stopparagraph

\startparagraph
\startquotation[right]
   There is no citation in the footnote to this block 
quotation\footnote{This footnote has no citation.}
\stopquotation
\stopparagraph

\startparagraph
   \quotation{There is a citation in the footnote to this non-block 
quotation paragraph\footnote{This footnote has a citation 
\cite[Eijkhout1991].}}
\stopparagraph

\startparagraph
   \quotation{There is no citation in the footnote to this non-block 
quotation paragraph\footnote{This footnote has no citation.}}
\stopparagraph

\startparagraph
   “There is a citation in the footnote to this standard 
paragraph\footnote{This footnote has a citation \cite[Eijkhout1991].}”
\stopparagraph

\startparagraph
   “There is no citation in the footnote to this standard 
paragraph\footnote{This footnote has no citation.}”
\stopparagraph

\blank[big]

%==================
% For testing with old regime, enable next and disable following
%\placepublications
%------------------
% For testing with new regime, disable above and enable following
\placelistofpublications
%==================

\stoptext

-- 
Rik