'/workspace' path already exists

Describe the Bug

Background Agent creation stuck in init cycle

Allocating resources for this agent (request id: {bc-{some UUID-here}
Error: Environment failed to start
Details:
fatal: destination path ‘/workspace’ already exists and is not an empty directory.

[Status] Checking out repository…

Hangs forever (or at least for 6 hours as of right now)

Steps to Reproduce

Uncertain

Expected Behavior

A remote environment is created on AWS or wherever you’re hosted

Operating System

Windows 10/11

Current Cursor Version (Menu → About Cursor → Copy)

Version: 1.1.6.0
VS Code: 1.101.2.0

Additional Information

Problem persists on multiple branches and through agent archiving/unarchiving and through deletion - skipping build cache has no effect.

Does this stop you from using Cursor

Sometimes - I can sometimes use Cursor