In the Settings window, select a Windows Terminal profile from the left section whose cursor shape you want to change. If you want, you can also first create a new profile in Windows Terminal and ...

you can still artificially adjust the DPI using your computer's settings menus. Just note that while using this method is safe, it can make your cursor seem buggy or less accurate. This is ...

Find a sub-heading called "Legacy cursor" and tick the box next to this option. After confirming this setting, the settings will be updated as soon as you close the in-game options menu.