Resolution:
No.
Manage Context cannot be used in BW processes that have been called by the Workflow Service Agent (CallProcess activity in Workflow Process). It can only be used in BW processes called by FormFlows.

This is the desired behavior. Manage Context is a BWWF actvitiy to extract required info from a Worflow Desktop action to initiate a formflow. Formflow is Workflow agnostic. A similar activity is not needed in case of BW processes called by Call Process tasks, because the ids can be mapped in the input of the BW process in the "Call Mapper" section in the "Call Process" activity.

FYI... Other activities do not have this restriction.