1.7.54 and 2.0.34 update breaks ANSI terminal output

[kwlzn]

Where does the bug appear (feature/product)?

Cursor IDE

Describe the Bug

After updating to 1.7.54 (with no other system changes), my ANSI shell prompt is no longer rendering as expected - and other things that show ANSI bg/fg colors like ls --color are in the same boat - the text is garbled and unreadable. Additionally, the color palette has noticably changed indicating a change in either the code or config for the built-in terminal. This issue persists beyond a reboot.

Steps to Reproduce

Repro:

1. Launch Cursor and start a new Terminal
2. echo -e "\n\e[42m\e[30m\e[42m\e[31m\e[30m mockuser \e[32m\e[44m \e[30m~/my/project \e[0m\e[34m\e[100m \e[94m(user/someuser/some-branch)\e[0m\e[100m\n\e[34m$ \e[0m"
3. observe breakage in how the echo statement is rendered

Expected Behavior

Text should be correctly rendered and legible. This is a regression.

Screenshots / Screen Recordings

Operating System

Linux

Current Cursor Version (Menu → About Cursor → Copy)

Version: 1.7.54
VSCode Version: 1.99.3
Commit: 5c17eb2968a37f66bc6662f48d6356a100b67be0
Date: 2025-10-21T19:07:38.476Z
Electron: 34.5.8
Chromium: 132.0.6834.210
Node.js: 20.19.1
V8: 13.2.152.41-electron.0
OS: Linux x64 6.14.0-33-generic

Does this stop you from using Cursor

Sometimes - I can sometimes use Cursor

[deanrie]

Hey, thanks for the report. There are known regressions with the new terminal tool in recent versions. Please try this:

Enable the Legacy Terminal Tool:

• Go to Cursor Settings → Chat → Inline Editing & Terminal
• Enable “Legacy Terminal Tool”
• Restart Cursor

The legacy tool uses a more stable terminal integration. Let me know if this fixes the ANSI rendering issue.

[kwlzn]

Thanks for the suggestion. I enabled Legacy Terminal Tool, but it did not resolve the issue. I also upgraded to 2.0.34 and the issue persists.

[kwlzn]

Any other thoughts on workarounds or actual fixes? This continues to be an issue with 2.0.54.