Hey, this is a known issue. When a custom OpenAI API Key is enabled (or Override OpenAI Base URL), those credentials are mistakenly applied to all models, including Composer 2, which should always run through Cursor servers.
Workaround: turn off the OpenAI API Key before using Composer 2, then turn it back on for your custom model. You can toggle it quickly with Ctrl+Shift+0.
More details: Composer 2 broken when custom OpenAI API Key is enabled
The team is aware, but there’s no ETA yet. Your report helps with prioritization.