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Correct answer: C. They are excluded both from Cursor's index and from the context that reaches the AI.
Explanation
The principle — An ignore file in Cursor is a context tool, not a display setting. It governs what enters the project index and what can be included in the material sent to the model.
Why the key is correct — Cursor describes ignore files as controlling which files it indexes and includes in AI context, so a generated folder listed there stays out of both. That is why excluding build output speeds indexing and keeps noise away from the Agent.
Why the others are wrong — Hiding files from the explorer or quick open is an editor convenience and a different feature. Trimming only search results would leave the index intact, which reverses the actual behaviour. Ignored files are also excluded rather than indexed and flagged on access.
Remember this — Ignoring is about context, not cosmetics.
Sources — Cursor's Ignore files documentation.
Sources
“Control which files Cursor indexes and includes in AI context by using ignore files.”
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