Hey there!
This one is actually working as intended rather than a bug, but there’s a one-setting change that should get you what you’re after.
In the Agents sidebar there are two separate controls in the customize menu: Grouping and Ordering. The Ordering control (Updated / Status / Created) only sorts the sessions inside each group. It doesn’t reorder the groups themselves. So with Grouping: Repository (or Workspace), the repo headers keep a fixed order: you can drag a header to move it, and brand-new repos appear at the top, but an existing repo won’t automatically jump up just because it had recent activity.
If you want the most recently updated work to always float to the top, open the customize menu (the settings icon at the top of the Agents sidebar) and switch Grouping → Updated. That flattens everything across workspaces into recency buckets (Today / Yesterday / Last 7 Days), so your latest work stays up top. Grouping → Status works well too, since it keeps Working and Needs Attention sessions at the top regardless of repo.
Keeping repository grouping while also having the groups themselves re-sort by last activity isn’t something the sidebar does today. It’s a real gap we’ve heard before, and there’s an open feature request collecting this exact feedback if you’d like to add your use case: Agents Window sidebar for multi-repo orchestration.
If instead you’re seeing sessions within a single repo not sorting by last update, that would be a bug. A quick screenshot would help me dig in.