MCP bug: Client error for command Streamable HTTP error: Failed to open SSE stream: Forbidden

Where does the bug appear (feature/product)?

Cursor IDE

Describe the Bug

[error] Client error for command Streamable HTTP error: Failed to open SSE stream: Forbidden

Steps to Reproduce

{
“mcpServers”: {
“demo-mcp-server-production”: {
“url”: “(https://)pigment.app/api/ai/mcp/…”,
“auth”: {
“type”: “oauth2”,
“authorizationUrl”: “(https://)pigment.app/login?server=mcp”,
“tokenUrl”: “(https://)pigment.app/api/oauth/token”,
“scope”: “offline_access mcp”
}
},

Expected Behavior

The MCP Server shows an error status while it actually works (I can use the tools).

It should display a green message.

Screenshots / Screen Recordings

Operating System

MacOS

Version Information

Version: 2.3.41
VSCode Version: 1.105.1
Commit: 2ca326e0d1ce10956aea33d54c0e2d8c13c58a30
Date: 2026-01-16T19:14:00.150Z
Electron: 37.7.0
Chromium: 138.0.7204.251
Node.js: 22.20.0
V8: 13.8.258.32-electron.0
OS: Darwin arm64 24.6.0

Does this stop you from using Cursor

No - Cursor works, but with this issue

Hey, thanks for the report. This is a known UI state management issue for MCP servers. After connecting, the UI doesn’t refresh the status even when the server is running fine and the tools are available.

The exact same bug was logged just yesterday: UI shows wrong MCP server status and the day before: MCP Server: Red error dot persists after successful reconnection - UI state not cleared

The team is aware and there’s a ticket filed. For now, the workaround is to toggle the server off and on in Settings, and the status will update.

This doesn’t affect functionality. If the tools work, it means the OAuth2 connection succeeded, the UI just isn’t syncing.