Refactor transform_messages (#1631)

* refactored code to simplify

* optimize function. Instead of iterating over each character, guess at size and then iterate by token.

* adding tests

* Add missing tests

* minor test fix

* simplified token truncation by using tiktoken to encode and decode

* updated truncated notification message

* Fix llm_config spec to use os.environ

* Add test case and fix bug in loop

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Co-authored-by: gagb <gagb@users.noreply.github.com>