Cursor client resilience audit

[eriknson]

Implement a mock API and harden the client-side API interactions and UI to handle failures gracefully.

This PR introduces a comprehensive mock API for testing various failure scenarios (rate limits, network errors, auth failures, malformed responses, slow responses). It then hardens the client by adding:

• Resilient API calls: cursorClient.ts now includes retries with exponential backoff for transient errors, timeouts, and robust error typing.
• Improved UI feedback: Replaces generic alerts with inline banners and toast messages for errors, loading states, and mock mode notifications.
• SDK stream resilience: cursorSdk.ts and sdk-agent/route.ts now handle stream timeouts and idle disconnects gracefully.
• Safe storage: storage.ts guards against localStorage corruption and unavailability.
• UI flow improvements: Debounces rapid form submissions and ensures polling mechanisms don't get stuck.

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[cursor]

Cursor Agent can help with this pull request. Just @cursor in comments and I'll start working on changes in this branch.
_{Learn more about Cursor Agents}

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Project	Deployment	Review	Updated (UTC)
cursor-web	Error		Jan 5, 2026 1:23am