Unfortunately, this looks like the former case. If the software can execute arbitrary code/binary, and you place a malicious binary, that's up to you to secure/sandbox the workspace, not the software. Unless cursor commit themselves to securing the user environment, which I don't think they are in the business of.
If you are generating a CVE report with LLM, please use LLM responsibly in helping you reproduce deterministically. Then please do the write up yourself, keep it as concise as possible and strip most adjectives in any LLM generated sections as they cannot help themselves to write without mostly useless exaggerations.