At high level, WSL2 provides a single optimized VM and Microsoft-compiled Linux kernel. Optimized here means that the VM only provides a small set of devices to the Linux kernel, and the kernel operates with exact known hardware, which is much smaller and simpler compared to a full blown kernel (which detects a large variety of hardware) and fuller featured VMs (c.f. qemu emulated devices: https://kashyapc.fedorapeople.org/virt/qemu/qemu-list-of-emu...).
And when you run multiple "distributions" or instances, they all share the same running VM and kernel. So after a one-time startup of the VM+kernel, opening more distributions/instances is like starting new system containers (similar to lxc/lxd or systemd-nspawn, which are also very quick to spawn on Linux) rather than new VMs. The architecture is quite similar to Linux-on-ChromeOS (Crostini).
And when you run multiple "distributions" or instances, they all share the same running VM and kernel. So after a one-time startup of the VM+kernel, opening more distributions/instances is like starting new system containers (similar to lxc/lxd or systemd-nspawn, which are also very quick to spawn on Linux) rather than new VMs. The architecture is quite similar to Linux-on-ChromeOS (Crostini).