"Agent encountered an error" when trying to setup new cloud agent env

Where does the bug appear (feature/product)?

Cloud Agent (GitHub, Slack, Web, Linear)

Describe the Bug

/env-setup  Set up a new development environment for this codebase. Follow the “Set up a new environment” workflow in the env-setup skill. Run the relevant applications and demonstrate that the environment works end to end.

Steps to Reproduce

Try to provision a new Cloud Agent environment for a repo

Screenshots / Screen Recordings

Operating System

Linux

Version Information

https://cursor.com/agents/bc-4832fa03-321b-4024-9e46-edea1d5906d9?setupSessionId=f7c91803-e494-49be-85cb-445d5bb198db

For AI issues: add Request ID with privacy disabled

Request ID: bc-4832fa03-321b-4024-9e46-edea1d5906d9

Does this stop you from using Cursor

Yes - Cursor is unusable

Hey there - thanks for the report and screenshot!

What you’re describing isn’t intended behavior, and it’s not caused by anything in your setup (that ENOENT line is a noisy fresh-VM message, not the real failure). This is an issue we’re tracking with Cloud Agent environment setup.

Merging this into an existing thread where we’re following the same issue: Cloud Agents: Agent encountered an error after AttachPty.

In the meantime: if the UI still says the environment is ready to be saved, try Save. If setup keeps erroring and your team has Impose Auto set to Hard under Dashboard → Cursor Router, a team admin can temporarily switch that to Off or Soft, re-run setup, then put it back.

I’ll post updates on the primary thread.

Appreciate the quick reply, the hard router setting was the culprit!

Thank you.