Current cursor versions unfamiliar with IDE's own functionality

Describe the Bug

I have been using, or at least trying to use, cursor itself to create rules that will govern how the agent does things in the future, when I run into common problems. Ironically, one of the most common problems I’ve run into, is that every time I try to create a cursor rule, it always, ALWAYS, uses the .cursorrules approach first. Which of course doesn’t work, as cursor now uses .cursor/rules with a separate file approach. I then have to correct it, tell it to search the web for the current approach, which it does, taking a while, and burning tokens, to do something with…itself…

I am honestly rather confused, that the agents implicit context, is not actually up to date so that when you try to have cursor do things with itself, it knows exactly how to do them, for the version of the IDE you are currently running. I feel this should just be standard and endemic…that every version of the IDE is always capable of doing everything with itself without having to do a web search, or rquire the addition and referencing of cursor ide documentation, etc. I shouldn’t have to waste time and tokens telling cursor to use .cursor/rules rather than .cursorrules every single time I have it generate a new rule…or for that matter, any time I have it do anything with its own functionality. It should, really, be entirely self aware, as far as knowing its own capabilities and how they work.

Steps to Reproduce

  1. Ask the current version of cursor to create a rule, and weep.

Expected Behavior

Cursor should use the current .cursor/rules/*.mdc file approach, rather than .cursorrules.

Operating System

MacOS

Current Cursor Version (Menu → About Cursor → Copy)

Version: 1.2.1 (Universal)
VSCode Version: 1.99.3
Commit: 031e7e0ff1e2eda9c1a0f5df67d44053b059c5d0
Date: 2025-07-03T06:08:06.355Z
Electron: 34.5.1
Chromium: 132.0.6834.210
Node.js: 20.19.0
V8: 13.2.152.41-electron.0
OS: Darwin x64 24.5.0

Does this stop you from using Cursor

No - Cursor works, but with this issue

Just curious, does the cursor team review these bug reports? Or is there another way to get bug reports the attention they need by the dev team?

I wonder – I’ll admit to not having tried this yet – if this setting is to blame:

FWIW, I’m turning it off, because even if that’s not the problem, I don’t want it using the old rules file anyway.

Hmm, interesting. Does that setting apply to the new .cursor/rules directory and all the rule files, or only .cursorrules (which I thought was deprecated…)?

Once the Cursor team has Grok in, it would be nice to have them enter a QOL period and fix some of the issues that have been plaguing cursor lately. I have SEVERE issues with terminals on windows 11/WSL2 as well. The cursor agent doesn’t seem to interact with terminal panels properly, and they are constantly stalling, or the agent is ignoring output, or interpreting output incorrectly.