Where does the bug appear (feature/product)?
Cursor IDE
Describe the Bug
Agent wants to run commands from subdirectory. Instead of cd subdir & cmd, agent runs cmd but sets working_directory in tool call.
If the named working_directory is a subdirectory within the sandbox, this appears to not change the working directory at all! Very confusing for the agents!
Steps to Reproduce
Ask agent to set working_directory to a subdirectory of your repo and run ls.
Expected Behavior
Setting working_directory to a subdirectory changes cwd.
Operating System
Linux
Version Information
Version: 3.18.9
VS Code Extension API: 1.128.0
Commit: 2ba48ff3f7514cc4643c52ca9f7b3173d9b66130
Date: 2026-08-27T01:42:22.092Z
Layout: Agent Window
Build Type: Stable
Release Track: Default
Electron: 40.10.6
Chromium: 144.0.7559.236
Node.js: 24.15.0
V8: 14.4.258.32-electron.0
xterm.js: 6.1.0-beta.291
OS: Linux x64 7.1.8-arch1-3
Does this stop you from using Cursor
No - Cursor works, but with this issue