It seems like this is largely a matter of what you’re asking for. If you wanted to do more research into the state of the field, an AI might be pretty good at answering your questions.
Why would any LLM 'think' in terms of trying to cite prior work?
It itself is prior work. It's asking a fish to show where the water is. The fish can't imagine that absence, and the LLM can't imagine anything not being prior work.
Yes, telling it that you want parsimonious solutions that reuse existing libraries makes a big difference. Why would it even try to do that sort of stuff if you didn’t ask?