It's a bit late but in case anyone else ends here.
This could be something related to this: https://github.com/microsoft/WSL/issues/9888
To fix it:
- Run the PS1 script -> https://github.com/microsoft/WSL/issues/9888#issuecomment-1607589141
- In "add windows features" uncheck: hyper-v , virtual machine platform, windows hypervisor platform, windows subsystem for linux
- reboot
- In "add windows features" check: hyper-v , virtual machine platform, windows hypervisor platform, windows subsystem for linux
- reboot