Hey, thanks for the report. This is a known issue, the exact same situation was described here: Can't install extension—Cursor repeatedly fetches "extensionquery"
The team is already aware and is looking into it. This is a client-side issue with how responses from the Marketplace API are handled.
For now, you can use the workaround you described (add a placeholder in extensions.json, reload the window, then reinstall). If we find a fix or there’s an update, it’ll be posted in the thread above.