Is this common on 96-98 cobras?

It might be stripped, Is it leaking?

No I dont see any leaks

Either the bolt or the hole is stripped out, sounds like it’s the hole though. It’s easy to do if you over tighten bolts on those aluminum heads.

Helicoil is really your only option to correct it. I had a valve cover bolt break off in a head once, that’s a fun job.

If you use thread lock, you need to clean the threads in the head and on the bolt before you apply the thread lock. Will not work if covered in oil.

Mine stropped out so I installed heli-coils. I decided to bottom long stainless set screws into the holes and use nuts and lock washers to hold the cover in place. Less chance of damaging the heads again.