Terminal freezes on paste in Cursor integrated terminal (M2 Max, macOS 26.3)

Description

Since updating to Claude Code v2.1.76 (the 1M context window release), pasting any text into the Claude Code prompt freezes the terminal completely when running inside Cursor's integrated terminal. The cursor becomes unresponsive — no typing, no shortcuts, no mouse input. The only recovery is to kill the terminal session and start a new one.

This does NOT happen in iTerm2 — pasting works normally in a standalone terminal. The issue is specific to Cursor's integrated terminal.

Steps to Reproduce

1. Open Cursor on an Apple Silicon Mac
2. Open the integrated terminal in Cursor
3. Launch Claude Code (claude)
4. Copy any text to the clipboard (from a browser, editor, etc.)
5. Focus the Claude Code terminal and paste (Cmd+V)

Expected Behavior

The copied text appears at the Claude Code prompt.

Actual Behavior

• Nothing is pasted
• The terminal becomes completely frozen
• No further keyboard or mouse input is accepted
• Must kill the terminal and restart to recover

Environment

| Detail | Value |
|---|---|
| Claude Code | v2.1.76 |
| macOS | 26.3.1 (Build 25D2128, Darwin arm64 25.3.0) |
| Hardware | Apple M2 Max MacBook |
| Node.js (system) | v24.2.0 |
| Cursor | 2.6.19 (Universal), Stable, Default track |
| VSCode base | 1.105.1 |
| Electron | 39.4.0 |
| Chromium | 142.0.7444.265 |
| Node.js (Cursor) | 22.22.0 |

Workaround

Use a standalone terminal (iTerm2, Terminal.app) instead of Cursor's integrated terminal. Pasting works normally there.

Notes

• This began with v2.1.76. Did not occur on prior versions.
• Only reproducible in Cursor's integrated terminal — iTerm2 works fine.
• Suggests a possible interaction between the new release and Cursor's terminal emulator (xterm.js / Electron).