If you're installing Windows Subsystem for Linux 2 (WSL2), or if you're trying to upgrade from plain old WSL, please check and double-check your CPU settings in your BIOS. For most motherboards, there is a setting to enable or disable CPU virtualization - this setting needs to be enabled if you want to successfully install and run WSL2, and it is often disabled by default. You may need to consult the manual and/or documentation for your specific motherboard to figure out which setting this is - for example, on ASUS motherboards, the relevant setting is labeled SVM.
Compared to WSL, WSL2 does offer better virtualization support and a true Linux kernel, but it does require more system access than its predecessor. Unfortunately, Microsoft's basic install instructions don't explicitly mention BIOS access, although it is mentioned in Microsoft's troubleshooting documentation.
Anyway, that's it. I just wanted to get something written after a prolonged silence. It's been a while (at least a year) since I set up WSL2, and while I did struggle with installation, I can't quite remember the whole story, or how I figured out the BIOS issue.
I did do some research just before writing this piece, and most third-party instructions for WSL2 setup now mention checking your BIOS, so it seems like a fairly common sticking point, although all of the instructions I saw in this regard seem like they were written over the past couple of months.
As such, I still think it's worth mentioning.