Hey, this isn’t a bug, it’s an intentional change in the new UI. The Delete button was replaced with Archive to help prevent accidentally losing chat history. Archived chats are removed from the active list, and you can restore them later if needed.
On the web version, Archive is currently the only way to remove chats from the list. In the IDE, in the editor window (not the Agents sidebar), deleting via the chat history dropdown is still available for now.
There’s already a request to bring back a full Delete option here: Allow single click deleting chats from chat history panel and Agent Side Bar, feel free to add your vote there.