Does this always use the most recent version of a NIP? Or is it limited to certain outdated NIP versions?

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It uses Nostrbook MCP so it can always read the NIPs directly!

https://nostrbook.dev/mcp

So when a NIP gets an edit in the official Github repository, does Nostrbook MCP automatically reflect this?

this is a good question. i don't know the answer to that. i do know if you mention the custom NIP naddr that the agent will reference it. as for stale NIPs versus updated NIPs, i don't know if they can be referenced via naddr as well or if the application data/git repo and website need to be updated too? we can ask.