Hi! I was able to reproduce this issue when upgrading to version 2.0.0 of ms-azuretools.vscode-docker. Microsoft changed this into an extension pack that points to ms-azuretools.vscode-containers, which was previously not visible in Cursor.
We have fixed this and ms-azuretools.vscode-containers should now show up in the Cursor extension marketplace. If you are on version 2.0.0 of the Docker extension, please make sure to also install ms-azuretools.vscode-containers. The “Containers” tab should then be visible in the sidebar.