The action context is unusual (and to your older question is implemented only in the UI as far as I know which is why you don’t see it listed in the docs with the others). It is not applied to a parameter, it’s actually applied to a parameter group and then turns that parameter group into the complete set of action configuration inputs without any additional work on the user’s part.
parameterGroups:
- name: customAction
context: action
label: Select a custom action
You can see a working example in my old confirmation button widget.