Hey, thanks for the report. This matches a known terminal issue on Windows. Please try in order:
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Settings
Ctrl+Shift+J→ Agents → Inline Editing & Terminal → enable Legacy Terminal Tool, thenCtrl+Shift+P→ Terminal: Kill All Terminals → fully restart Cursor
Details: Agent Terminal not working -
If there’s still no output, delete the corrupted workspaceStorage state and restart Cursor
Guide and warnings: [SOLVED] Terminal Output Not Showing in Agent Mode - Delete workspaceStorage Folder (v2.1.39, Windows 11) -
As an alternative, set Git Bash as the default terminal on Windows
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Temporarily disable the PowerShell extension and check again.
The team is working on a fix and it should land in the next update.