Markdown Formatting in output from agents in IDE chat breaks occasionally

Where does the bug appear (feature/product)?

Cursor IDE

Describe the Bug

Markdown Formatting from Cursor IDE agents output breaks.
Never had this before.

e.g 1:
Here’s what was wrong and what I fixed:

Why Leonardo created the STOP file: You were right — the
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sGuide"sectioninhisownCLAUDE.mdduringaprevioussprintthatcontainedexplicitpseudocode:‘ifdaily
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ost>=48: EMERGENCY STOP— includingtouch /workspace/artifacts/leonardo-STOP. He was following his own instructions, not autonomy-config.json. The cost_limit_enabled: false` config was being ignored because his CLAUDE.md told him to override it.

e.g. 2:

e.g output:
nabled:false‘intheconfig,∗∗hecreatedtheSTOPfilehimself∗∗basedonhisowntrainedjudgment.Hesawthecostexceeding50 and overrode the config with his own decision. That’s the bug — he shouldn’t self-impose limits when the config explicitly disables them.

Steps to Reproduce

Not entirely sure
-running cursor IDE with Sonnet 4.6 thinking. More details of my setup in my previous bug report.
-chatting with agent in the sidebar in agent view (fairly long conversation)
-agent suddenly starts outputting broken markdown here and there ( or maybe this is on the client side not sure)

Expected Behavior

Text should be formatted properly.

Screenshots / Screen Recordings

Operating System

MacOS

Version Information

Operating System
MacOS

Version Information
Client machine: MacBook M1 on Sequoia (Cursor SSH client)
Version: 2.6.11
VSCode Version: 1.105.1
Commit: 8c95649f251a168cc4bb34c89531fae7db4bd990
Date: 2026-03-03T18:57:48.001Z (4 days ago)
Build Type: Stable
Release Track: Default
Electron: 39.6.0
Chromium: 142.0.7444.265
Node.js: 22.22.0
V8: 14.2.231.22-electron.0
OS: Darwin arm64 24.6.0
Remote machine: Mac Mini M4, macOS Tahoe (26)
Connection: Cursor SSH Remote over Tailscale (local network)

For AI issues: which model did you use?

Sonnet 4.6 Reasoning

Does this stop you from using Cursor

No - Cursor works, but with this issue

Hey, this is a known issue with Markdown rendering in chat. It showed up after a recent update. A few users have hit the same thing:

The model output itself is fine. This is just a client-side display bug. The team is aware of it.

As a temporary workaround, right click the response, choose Copy, then paste it into a text editor. The text will look normal.

1 Like

Hey @Adrien_Koo!

The markdown rendering issue where dollar signs and special characters were parsed incorrectly has been addressed in a recent Cursor update. Updating to the latest version should resolve this.