Red Hat XML extension stuck in "Activating..." state - workspace-dependent, mutually exclusive activation across multiple Cursor windows

Type: Bug

Issue Summary for Bug Report

Title: Red Hat XML extension stuck in "Activating..." state - workspace-dependent, mutually exclusive activation across multiple Cursor windows

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Environment:

• Editor: Cursor IDE (VS Code fork)
• Extension: XML (Red Hat) redhat.vscode-xml
• OS: Mac

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Problem:
The Red Hat XML extension becomes permanently stuck in "Activating..." state in one workspace while functioning normally in another. The "broken" and "working" status can swap between workspaces after restarts, suggesting a race condition or mutex issue in multi-window scenarios.

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Symptoms:

1. Format Document fails with: "There is no formatter for 'xml' files installed."
2. Developer: Show Running Extensions shows redhat.vscode-xml as "Activating..." indefinitely
3. Semantic XML folding unavailable (falls back to indentation-only)
4. XML language mode detected correctly

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Steps to Reproduce:

1. Open two separate workspaces in Cursor (each in its own window)
2. Both workspaces have identical extensions installed, including Red Hat XML
3. Open an XML file in each workspace
4. Run Developer: Show Running Extensions in both windows
5. Observe: one workspace shows the extension as activated (with timing in ms), the other shows "Activating..." indefinitely
6. Restart Cursor completely
7. Repeat steps 3-5 — the "stuck" workspace may swap (previously working workspace now stuck, previously stuck workspace now working)

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Key Observations:

• Only one workspace at a time can successfully activate the extension
• The "winner" appears to be whichever workspace/window initialises first
• Standard remediation (reload window, restart extension host, reinstall extension) does not resolve the stuck state
• Both workspaces have similar XML-related settings (xml.validation.enabled: false, [xml].editor.formatOnSave: false)

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Attempted Fixes (all unsuccessful):

• Reload Window
• Restart Extension Host
• Uninstall/reinstall extension
• Quit and reopen Cursor
• Explicit [xml].editor.defaultFormatter setting
• Various xml.* configuration toggles

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Hypothesis:
The LemMinX language server or extension activation appears to use a shared resource (socket, lock file, or global state) that only permits one instance across all Cursor windows, causing activation to hang indefinitely in subsequent workspaces.

Extension version: 0.29.0
VS Code version: Cursor 2.3.0-pre.21.patch.0 (77a0ad532aee10b3ef76212ed11c845ef9383f00, 2025-12-20T08:11:39.003Z)
OS version: Darwin arm64 25.1.0
Modes:

System Info

Item	Value
CPUs	Apple M2 Max (12 x 2400)
GPU Status	2d_canvas: enabled direct_rendering_display_compositor: disabled_off_ok gpu_compositing: enabled multiple_raster_threads: enabled_on opengl: enabled_on rasterization: enabled raw_draw: disabled_off_ok skia_graphite: enabled_on trees_in_viz: disabled_off video_decode: enabled video_encode: enabled webgl: enabled webgl2: enabled webgpu: enabled webnn: disabled_off
Load (avg)	5, 9, 7
Memory (System)	96.00GB (9.07GB free)
Process Argv
Screen Reader	no
VM	0%

The issue names no source files or tests; start by reproducing the behavior with the Red Hat XML extension in two Cursor/VS Code windows and inspect extension activation and LemMinX startup. Done means both workspaces activate the extension without hanging, and XML formatting and semantic folding work in each window.