Thanks for sharing - this fixed it for me.
For those looking, its under Cursor > Settings > Cursor Settings > Chat > Inline Editing & Terminal
thanks cursor team, now we can finally fet back to work 
O cursor é uma excelente solução, já ajudou bastante e eu vinha sempre esperando uma nova boa surpresa a cada atualização.
Mas essa de tornar o terminal não editável, impedindo até acessos remotos, que era uma das coisas que eu mais utilizava até pra resolver problemas em outros ambientes, foi de lascar totalmente
Praticamente virou o chatGPT Web…
Cara isso é péssimo e esse recurso precisa ser restaurado o quanto antes, dessa forma, a primeira solução que oferecer isso, sem dúvida, vai ser a mais utilizada no mundo..
E ta vindo aí uma chamada TRAE, ela já oferecia uns recursos interessantes, se ela permitir edições no terminal e acessos remotos a partir da IDE, eu e muito outros vamos acabar migrando, infelizmente.
Ah, e sem contar que é bem mais barata também…
Pessoal do CURSOR, nos ajudem a lhes ajudar…
For me on MacOS, Cursor > Settings > Cursor Settings > Chat > Inline Editing & Terminal > enable Legacy Terminal Tool
I can’t believe they actually did this. Seriously, thank you, I’ve been checking this thread every day.
But also, **** MacOS and the Apple cultists lol
The setting shows up fine for me on Linux, and as someone who doesn’t open random junk in Cursor or let it run commands unless they’re on an allow list, I really hope I’m never forced into that sandboxed version of the agent terminal again. The so-called ‘legacy’ one works perfectly a little risky, sure, but powerful as hell.
Perfect solution 
The above solution for enabling Legacy Terminal Tool works for me 
However, I want to reiterate this is a shocking change and goes against all the reasons why I’d use cursor over VSCode. AND this was done by default with an update. The agent can no longer do any actual agent work on terminals. Please revert this change as soon as possible and do not keep changing defaults without notifying users, you’ll lose customers real fast if you keep doing this…
La solution ci-dessus fonctionne pour moi. Version 2.0.34
Merci 
This does not appear to fix the issue as of Cursor 2.0
I don’t understand how this is fixing the problem for some people and not for others. What Linux distros does this fix the issue on? It doesn’t seem to fix the issue on Ubuntu.
Hi, I found the legacy terminal tool - good. But it does not respect our user’s default shell, which means the experience is still pretty broken. I have to open my shell and source its .profile file. It does not recognise when the command has finished.
Cursor seems to like to rush new features out the door without even seemingly testing, and then nukes features that were working fine as they were.
It has some serious thinking to do. Its shortcuts conflict with VSCode keyboard shortcuts, it wrecked things which worked in VSCode (like closing the bar without needing Ctrl+B). It has serious discoverability issues. Don’t treat us as if we are morons. Please just make functionality discoverable and let us decide what we want to do with it.
The terminal also has a bug where you are scrolling and then it suddenly just up to the top of the history. Also highlighting from the terminal and Cmd Shift F is broken - it does not put that text into the search like it should.
Version: 2.1.49
This is issue is back again! For christ sake! Cursor Team, do you even use your product? This is effin frustrating, I can no longer use the app because of this. I’m subscribed as ULTRA fyi!
What is even the purpose or use of this feature??? Why don’t you just get rid of it!
This is issue is back again! -_- why would you do that?
Im on mac:
For example, to test or invoke Cursor Terminal that Composer have access to, i would ask it to “Run pwd”
The problem is we only have 3 choices:
-
Ask (This have no access to terminal)
-
Plan (This have no access to terminal)
-
Agent (This opens Agent Terminal that are read-only)
How to invoke Cursor Terminal?
They are red-only again 
this is a show stopper and blocker….
Also don’t reset user settings after an update. I set legacy mode in before the update, and after update the settings reset… this is too bad and making dev setups unstable and eating lot of time….
Cursor, why you did this stupid thing again? what the problem with you???
We already with community discussed about your fault but you did it again