Cursor stopped highlighting Agent changes code

Where does the bug appear (feature/product)?

Cursor IDE

Describe the Bug

Cursor stopped highlighting Agent changes code, I know this issue was resolved on V2.X
but now I see its again:
Please help

Steps to Reproduce

There is no specific steps its just stopped to work

Expected Behavior

Agents changes should be highlighten

Operating System

MacOS

Version Information

Version: 3.1.15 (Universal)
VSCode Version: 1.105.1
Commit: 3a67af7b780e0bfc8d32aefa96b8ff1cb8817f80
Date: 2026-04-15T01:46:06.515Z (2 days ago)
Layout: editor
Build Type: Stable
Release Track: Default
Electron: 39.8.1
Chromium: 142.0.7444.265
Node.js: 22.22.1
V8: 14.2.231.22-electron.0
OS: Darwin arm64 25.4.0

For AI issues: which model did you use?

opus 4.6

Does this stop you from using Cursor

No - Cursor works, but with this issue

Hi @MikePendo

Thanks for the report. Can you check how Inline Diffs is configured in your Cursor Settings (under Agents > Applying Changes)?

@Colin
Thanks a lot that did the trick (though I didnt disable it on my own)
Sorry to bother please close the ticket