Where does the bug appear (feature/product)?
Cursor IDE
Describe the Bug
We identified a critical bug in Cursor Router’s fallback logic. When an unrecognized model classification event occurs, the Router treats different accounts under the same Enterprise organization inconsistently—allowing some users to fall back gracefully to default models while throwing a hard ConnectError: [resource_exhausted] error for others, completely blocking developer workflows on our Enterprise account.
Support ticket T-E74983 confirmed via backend logs that this is NOT a quota exhaustion issue, but a false resource_exhausted error surfaced by the Router when its classifier fails hard instead of falling back.
Steps to Reproduce
On an Enterprise request-based plan, select Auto mode in Composer or Chat.
Ensure the user’s monthly premium request quota is exhausted or hitting a boundary.
Submit a prompt or code generation request.
Result: Instead of gracefully falling back to a default/cheaper model or handling the classifier error gracefully, the request fails immediately at the transport layer with:
[composer] Error in AI response ActionRequiredError: You’ve reached your monthly usage limit / ConnectError: [resource_exhausted].
Expected Behavior
When the Router encounters an unrecognized model classification event or quota limit under Auto mode, it should fall back gracefully to default/lower-cost models (as it did for other team members in our org) rather than throwing a hard ConnectError: [resource_exhausted] and blocking the request entirely.
Screenshots / Screen Recordings
Operating System
MacOS
Version Information
Version: 3.15.6
VS Code Extension API: 1.128.0
Commit: a1f686545fd0ce8917bbd2449f733551a9bce420
Date: 2026-08-06T01:41:03.876Z
Layout: IDE
Build Type: Stable
Release Track: Default
Electron: 40.10.3
Chromium: 144.0.7559.236
Node.js: 24.15.0
V8: 14.4.258.32-electron.0
xterm.js: 6.1.0-beta.291
OS: Darwin arm64 22.6.0
For AI issues: which model did you use?
Auto (Cursor Router)
For AI issues: add Request ID with privacy disabled
Blocked Request (Failed with resource_exhausted): 917a4f9b-cbc7-482a-80c3-4578ee755c79
Working Request (Same org/status, fell back gracefully): fc0ce7f9-9aa0-456a-b711-37e8773cce4c
Does this stop you from using Cursor
Yes - Cursor is unusable
