Useful info: the fact that it works fine on 2026.02.13 but breaks on 2026.02.27 clearly points to a regression.
This matches a similar report where --print was also hanging. I passed it to the team along with your bisect, no specific ETA yet.
As a temporary workaround, you can wrap the call with timeout, for example:
timeout 30 cursor-agent create-chat
Or roll back to 2026.02.13 since everything works there.
Let me know if anything changes.