Hey, this is a known packaging bug. The cursor-socket extension is missing its out/ folder, so the extension host crashes on startup.
You mentioned you already tried copying the file, but the key is to copy the entire dist/ directory recursively, not just one file. Since you used the system installer, try this in Command Prompt as Administrator:
cd "C:\Program Files\cursor\resources\app\extensions\cursor-socket"
xcopy dist out\ /E /I
Then fully restart Cursor.
Another user with the same setup confirmed this exact command fixed it: Can't fix "Extension host terminated unexpectedly 3 times within the last 5 minutes" - #5 by Dev_Maestro
If that still doesn’t help, do you have any VPN software installed, even if it’s not active? That has also caused this crash for some users.
This fix is included in newer builds, so once the next update rolls out to you it should be permanently resolved. Let me know how it goes.