Hey, thanks for the report. This is a known issue where the agent hangs on the client side after the backend has already processed the request.
You are on Windows 11 Insider build 26200. A user on the same build Waiting for extension host - blocking error had this issue and fixed it by moving heavy directories like node_modules, build artifacts, and a large .git history outside the workspace.
Please try this:
Check your workspace for heavy directories. Move them out or add them to .cursorignore.
Disable HTTP/2. Add this to settings.json via Ctrl+Shift+P then Preferences: Open User Settings (JSON):