From the official documentation we know that:

context defines either a path to a directory containing a Dockerfile, or a URL to a git repository.

In your case, . is a relative path representing the current directory where you run docker-compose command and where Compose can find a Dockerfile (and obviously also the docker-compose.yaml file).

The Dockerfile can also be elsewhere using the dockerfile keyword like that in this example:

version: "3.3"
services:
  
  service-A
    build:
      context: ./all-service
      dockerfile: ./service-A/Dockerfile

  service-B
    build:
      context: ./all-service
      dockerfile: ./service-B/Dockerfile

  service-C
    build:
      context: ./all-service
      dockerfile: ./service-C/Dockerfile 

The additional context keyword here is to tell the Dockerfile where to find its dependent files.

For instance, in one of your Dockerfile there are these lines:

WORKDIR /my-app
COPY package.json package.json
COPY package-lock.json package-lock.json
RUN npm install
COPY requirements.txt requirements.txt
RUN pip install -r requirements.txt

These three files must be in the context directory or git repository: package.json, package-lock.json, requirements.txt.