It isn't the most character efficient way of encoding 128 bits UUID v1/v2 is impractical in many environments, as it requires access to a unique, stable MAC address UUID v3/v5 requires a unique seed ...

AI agents pass IDs through prompts, tool calls, logs, traces, and memory. UUIDs are great for databases, but they are expensive in context windows and hard for humans or LLMs to copy reliably.