Where does the bug appear (feature/product)?
Cursor IDE
Describe the Bug
In a setup with a parent `.cursorignore` and a nested folder opened as a separate workspace, Agent file tools can return `Read permission denied` for files in the opened workspace even when `Hierarchical Cursor Ignore` is OFF.
Steps to Reproduce
1. In a parent folder, create a `.cursorignore` containing `*/` (ignore all immediate subfolders). Then open one of those subfolders as a separate Cursor workspace.
2. Turn `Hierarchical Cursor Ignore` OFF and restart Cursor.
3. Ask Agent to read/create/delete a file in that opened subfolder workspace (for example `AGENTS.md`) and observe `Read permission denied`.
Expected Behavior
If parent ignore rules are applied via `Hierarchical Cursor Ignore`, behavior should be clearly scoped and predictable for Agent file tools in nested workspaces.
Agent file-tool behavior should match documented ignore semantics without ambiguity.
Operating System
Windows 10/11
Version Information
Version: 3.3.30 (system setup)
VSCode Version: 1.105.1
Commit: 3dc559280adc5f931ade8e25c7b85393842acf30
Date: 2026-05-09T18:28:42.332Z
Layout: editor
Build Type: Stable
Release Track: Default
Electron: 39.8.1
Chromium: 142.0.7444.265
Node.js: 22.22.1
V8: 14.2.231.22-electron.0
OS: Windows_NT x64 10.0.26200
Additional Information
- When `Hierarchical Cursor Ignore` is ON, the file tree correctly marks files as ignored, so UI indication appears correct.
- Related discussion: .gitignore above workspace root is ignored
- In similar tests, shell operations on the same paths can still succeed while Agent file tools fail with permission-denied errors.
Does this stop you from using Cursor
No - Cursor works, but with this issue