Great proposal. I completely agree, and this highlights yet another gap in how Cursor handles hook lifecycles and context retention.
I want to point out that this shouldn’t be looked at in isolation, as the entire hooks ecosystem currently has major systemic issues. For instance, while you are losing context across compaction boundaries, the postToolUse hook is failing to inject context entirely (it suffers from empty input payloads, completely discarded output, and intermittent firing).
Losing persistent instructions during compaction just adds to the friction of trying to build reliable agent workflows in Cursor right now. I highly recommend the engineering team look at this feature request alongside the severe bugs currently breaking other hooks.
For visibility, here is the thread detailing the complete breakdown of the postToolUse hook. It all seems tied to the same underlying context pipeline: