I think I nailed it down.
The Extension Import Cost is messing up and running in combination with cursor into a loop that is basically blocking all other processes. This extension is utter bullshit because it uses normally already way too much resources, but it’s not crashing the extension runner in original VS Code. Here in cursor the chat seems to use something that is kicking that loop over the top and grilling your CPU. So not really a problem of cursor.
So this is the shit extension that needs to be removed
This here is the alternative that is working and doing the same without crashing everything else.
Cursor was reaching out to me directly this night with the offer to debug. Thanks for the great support. I can reactivate my subscription and I’m happy to use cursor again)
I will update this here if something changes. But I tested it plenty of times and always after activating the import cost plugin, cursor went nuts.