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.