Hi Netanel!
This is a known visual regression in v2.6.20 that affects the sidebar layout, particularly when the activity bar is in vertical mode. Several other users have reported the same blank/grey gap appearing at the bottom of the sidebar.
The team is already tracking this and a fix has been committed. It should ship in the next update.
I’ll merge this thread into the main tracking thread so the discussion stays in one place: https://forum.cursor.com/t/interface-bug-extra-color-area/155113