[rebunkerjr]

A little more testing reveals that this setup also works as you'd expect with the Context Filter set to On Hold:
Contexts
-People
--Allen
---Active
---Waiting
--Jill
---Active
---Waiting
--John
---Active
---Waiting
etc.

The trick to making this work is to ensure that there are no items in the high-level name context (e.g. Jill). Anything in the high-level context appears in the On Hold filtered view, even though it's an active task.