Terminal activates Python .venv even when python.terminal.activateEnvironment is false

Describe the Bug

The integrated terminal in Cursor automatically activates the project’s .venv environment on startup, even when all settings to disable this behavior are correctly configured.

Steps to Reproduce

Create a project with a Python virtual environment in a .venv directory.
In the project’s .vscode/settings.json, set “python.terminal.activateEnvironment”: false.
In the global User settings, confirm that “python.terminal.activateEnvironment” is also false or not present.
Disable persistent terminal sessions by setting “terminal.integrated.enablePersistentSessions”: false in User settings.
Open a new integrated terminal (using WSL on Windows).

Expected Behavior

Expected Behavior:
The terminal should open a clean shell session without activating the .venv environment, respecting the activateEnvironment setting.
Actual Behavior:
The terminal starts, and the .venv is immediately activated, showing (.venv) in the prompt.
Workaround / Further Diagnosis:
The issue is resolved by disabling shell integration. Setting “terminal.integrated.shellIntegration.enabled”: false in the User settings.json and restarting Cursor prevents the unwanted activation. This suggests the bug lies within the shell integration script, which appears to be ignoring the standard Python extension settings for environment activation.ironment setting.

Operating System

Windows 10/11

Current Cursor Version (Menu → About Cursor → Copy)

Cursor version: 1.0.0

Does this stop you from using Cursor

No - Cursor works, but with this issue