The previous implementation supports resolving the value val it was assigned in the beginning. but this is removed in the new solution. Is this intended?

Yes. Since we have SKIP signal. Resolving value was a workaround.

would there be a case we actually want it to resolve some default value?

A straight forward case would be in bindPrompter, we have multiple if/else based on previous states, and maybe there are two case leads to skip prompter, but we want different value for this field even though it is skipped.

With previous solution we will be able to do as the follows

        form.stuff.bindPrompter(
            (f) => {
                if (f===1) {
                     return skipPrompter(1)
                }
                if (f===2) {
                     return skipPrompter(2)
                }
               else{
               return createQuickPick
              }
            },
            { setDefault: "skipped"} // set default won't be ideal in this case
        )

The previous workaround for skipping prompter was to automatically resolve the value and skip displaying UI to customer. However, that did not work for backward direction since the auto resolve always revert the backward flow to forward flow.

So we are splitting the skipping case from setting default value case. For how to use the SkipPrompter, please follow this example: aws-toolkit-vscode/packages/core/src/dev/activation.ts at master · vicheey/aws-toolkit-vscode

You can consider resolving the value when forward and skip when backwards right?

How would this work on Wizard prompter? Will it able to identify the direction of it's parent wizard?

The WizardPrompter is still considered a prompter. It is not responsible for identifying parent wizard direction.

This state management functionality belongs to the stateController object within the Wizard class. Each Wizard is responsible for prompting, receiving, and processing answers from prompters (including WizardPrompter). Each answer contains data and a ControlSignal (undefined indicates no direction change). The Wizard class's stateController tracks the current direction and uses the ControlSignal from the prompter to manage direction changes.

How do we restore the state of WizardPrompter when a back button is clicked?
Well, we do not restore the state of the WizardPrompter object, we always instantiate a new instance of this class. We, however, restore the state of Wizard class used for instantiate the WizardPrompter. Again, the (parent) wizard class is responsible for this (reference)

This name seems confusing, unless I'm mistaken. This class is a Wizard that contains nested wizards, it's not itself nested. Right? So maybe a better name is Wizards (plural). That also improves discoverability because it sorts alphabetically next to Wizard.