This is a known bug.
As a workaround, add this to your shell profile (~/.zshrc or ~/.bashrc):
export TERM_THEME=light
Then restart your shell and relaunch the CLI. That should make everything readable.
Your proposed cli-config.json theme block is a great suggestion. We’ll be tracking this post to gauge interest from the community, which helps our product team prioritize accordingly.
You may also find this related thread helpful, where our team discussed the root cause in more detail: Cursor CLI agent - Input Window black background with black text