Cursor making up files that don't exist - Major Bug

Thanks for reporting a bug you have found in Cursor!
Please add the following info to help us diagnose your issue:

:white_check_mark: Check the forum to ensure the issue hasn’t been reported already
can’t see the bug reported before
:lady_beetle: Provide a clear description of the bug
The bug created a whole file it was asking me to analyse and approve changes for but the file did not exist in my code base at all and as far as I am aware never did.
:counterclockwise_arrows_button: Explain how to reproduce the bug (if known)
don’t know how to reproduce
:camera: Attach screenshots or recordings (e.g., .jpg, .png, .mp4).
attached
:laptop: Tell us your operating system and your Cursor version (e.g., Windows, 0.x.x).
sequoia 15.1 mac 0.48.8
:prohibited: Tell us if the issue stops you from using Cursor.
it makes it very difficult to use if we are working on fantasy code.

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