Errors trying to update .ai-coding/**/*.{md,txt} result in command line sed and echo fallback every time after 0.46

:white_check_mark: Check the forum to ensure the issue hasn’t been reported already
DONE - didn’t find any RECENT issues that are similar

:lady_beetle: Provide a clear description of the bug
I have a .ai-coding/ directory, and I put markdown files in it that cursor should read and write for storing the agent plan, checklist, state. Up until 0.46 it was able to write to this directory (with approval button popping up; that was okay). As of 0.46, for some reason cursor is able to read files there, but when it suggests updates to those files, it encounters 2-3 errors, and so then it results to using command line commands such as sed and echo commands for editing those files, which is very inefficient and blunt.

Updates suggested to files outside of this directory are made without any issue (with the exception of .cursor/rules/, which have special bugs I haven’t enumerated here).

After I rename the directory from .ai-coding to ai-coding, then the agent is able to edit the files in that directory without problem … for a while. Then the issues came back after a while.

:counterclockwise_arrows_button: Explain how to reproduce the bug (if known)
Create `.ai-coding/TICKET-description/**.{md|txt}
Instruct agent to update it in a cursor project rule
explicitly ask agent to update one of those files
expected result: file update is suggested with normal process
actual result: agent tries to suggest an update 2-3 times, which fails, and then it falls back to editing the files with the command line

:camera: Attach screenshots or recordings (e.g., .jpg, .png, .mp4).

:laptop: Tell us your operating system and your Cursor version (e.g., Windows, 0.x.x).

Version: 0.46.9

VSCode Version: 1.96.2

Commit: 3395357a4ee2975d5d03595e7607ee84e3db0f20

Date: 2025-03-05T08:14:11.312Z (1 day ago)

Electron: 32.2.6

Chromium: 128.0.6613.186

Node.js: 20.18.1

V8: 12.8.374.38-electron.0

OS: Darwin arm64 23.6.0

:prohibited: Tell us if the issue stops you from using Cursor.
The ability to have the agent update files is pretty central to how I use cursor. It’s slowing me down significantly and also presumably superfluously eating up fast requests, since each file edit requires 2-3 failures before attempting a command line update.