Cursor searches through all files on every prompt

I’ve been using Cursor for almost 4 months now. Recently I noticed that it searches/indexes all the files an every single prompt, even for seemingly simple, non-project-related, generic prompts. I’ve tried to toggle various settings but with no success. Is this an expected behaviour? Am I doing something wrong?

It’s becoming pretty annoying because every response now takes a good bunch of seconds. Thanks!