Claude can't interact with any tools over the span of the last 4 updates

[Cooper]

Where does the bug appear (feature/product)?

Cursor IDE

Describe the Bug

None of the tools work like normal. Instead we get a response with seemingly XML blocks sprinkled throughout depending on the tools that get used. Files aren’t being created in Plan or Agent mode, the selected LLM acts like it’s consuming MCP tools when it’s not and then it comes up with a wrong response because it doesn’t have the data it needs, etc.

Steps to Reproduce

Just chat through Cursor IDE and ask it to make a plan, etc.?

Expected Behavior

MCP tools should be used instead of seeing in the chat or <ask_question></>, etc.

Screenshots / Screen Recordings

Operating System

MacOS

Current Cursor Version (Menu → About Cursor → Copy)

Version: 2.1.26 (Universal)
VSCode Version: 1.105.1
Commit: f628a4761be40b8869ca61a6189cafd14756dff0
Date: 2025-11-24T05:39:06.655Z
Electron: 37.7.0
Chromium: 138.0.7204.251
Node.js: 22.20.0
V8: 13.8.258.32-electron.0
OS: Darwin arm64 23.2.0

For AI issues: which model did you use?

Sonnet 4.5, Opus 4.5, Grok Code, GPT5

For AI issues: add Request ID with privacy disabled

8388097c-4468-4898-bb95-41683c2406d3

Additional Information

I say it’s unusable because we don’t get any the useful context specific output we’ve paid for when tools need to be consumed.

Does this stop you from using Cursor

Yes - Cursor is unusable

[deanrie]

Hey, thanks for the report. This is definitely concerning, since seeing raw XML tags instead of normal tool execution is not expected behavior.

Please try these diagnostic steps:

• Fully restart Cursor - a similar tool execution issue was resolved after a full restart.
• Test in a new chat - create a new chat with a simple request and see if the issue still happens.
• Check console errors - open Developer Tools (Help > Toggle Developer Tools) and share any errors from the Console tab when the XML tags appear.
• Check custom MCP servers - do you have any MCP servers configured in your settings?

Also, please clarify:

• Does this happen in brand new chats, or only in existing conversations?
• Do you have any custom .cursorrules files in your project?

If a restart does not help, I’ll pass this on to the team. The fact that it affects all models and keeps happening after updates suggests that something specific in your environment or configuration might be causing it.

[Cooper]

I’ve restarted this a number of times already, some full device reboots as well. My Custom MCP servers haven’t been changed in months, I disabled them all as a test though and same issues. Console errors not showing anything on my end when I run a chat. These ones are in console way before though and the chat runs fine. It doesn’t matter if it’s a new or old chat. This happens with Sonnett 4.5, Opus 4.5, GPT5.x and GPT5.x codex won’t even connect. Auto works fine and Gemini 3 works. Hoping that I’m not going to miss out on this Opus 4.5 promotion, I’m really excited to see what it does.

1. Team Repository Connection Errors

• Name: getTeamRepos ConnectError

• Type: [invalid_argument] transport connection failure

• Service: aiserver.v1.DashboardService

• Function: pollRepoBlocklist

2. Team Admin Settings Connection Errors

• Name: getTeamAdminSettings ConnectError (multiple instances)

• Type: [invalid_argument] transport connection failure

• Service: aiserver.v1.DashboardService

• Functions: refresh, admin settings fetch

3. AutorunSettings Fetch Failure

• Name: AutorunSettings network error

• Type: Network error with no cache fallback

• Context: Admin settings retrieval

4. AI Transport Stream Error

• Name: Extension host stream error

• Type: [canceled] operation aborted

• Context: AI connect transport reporting

5. Chat Composer Failure

• Name: Incomplete AI response error

• Type: Chat submission failure

• Context: submitChatMaybeAbortCurrent - request was aborted

@deanrie

• Does this happen in brand new chats, or only in existing conversations?
• Do you have any custom .cursorrules files in your project?

If a restart does not help, I’ll pass this on to the team. The fact that it affects all models and keeps happening after updates suggests that something specific in your environment or configuration might be causing it.

@deanrie

If a restart does not help, I’ll pass this on to the team. The fact that it affects all models and keeps happening after updates suggests that something specific in your environment or configuration might be causing it.

[deanrie]

Thank you for the detailed response and console errors. The transport connection failures combined with raw XML are unusual, but I have a strong lead based on a recently solved similar case.

Please try testing with extensions disabled:

• Run cursor --disable-extensions in your terminal
• A new Cursor window will open
• Without opening a repo, open the AI chat pane
• Check if the tools work correctly now

Also, please clarify:

• Do you have any .cursorrules files in your project directories?

If extensions aren’t the issue, I’ll escalate this to the team.