SOLVED
The main culprit was zsh keybindings, following the default ‘Emacs’ scheme, CTRL K cuts (deletes) everything upto the end of the line in shell starting from your cursor position.
I believe macOS users don’t experience this cause of iTerm2 or some terminal emulator and/or the use of cmd to bypass some terminal keybindings.
Anyways,
The solution is to manually exclude CTRL+K (and other conflicting key bindings) in your zsh config:
bindkey -r '^K'
Tried editing the keybindings JSON in from Cursor + disabling/removing conflicting bindings, did not work.
Did this and reinstalled Cursor.
For proper cursor installation on linux please refer to (and checkout comments):