I’m having the same issue.
I have been using cursor for a week and only since yesterday I started to have regular failure of indexing (“handshake failed”).
Since I haven’t change anything in my settings and my codebase hasn’t significantly grown from 2 days ago when everything was working fine, I have a hard time understanding what’s going on.
I have seen posts in this forum sometimes from a year ago with the exact same problem we are having so it looks like it’s a recurring issue with Cursor.
It’s still usable even without codebase indexing but it make Cursor a much less interesting tool for helping building software.
I know Cursor’s founders are young, but they might want to make sure their current features are robust before working on exciting new stuff.