First the powershell is a very good terminal and some even consider it better than bash. And if you’re talking about the actual terminal emulator it also became really good with the new windows terminal(which is also open source) it bas many good features and customization options. Also wsl2 IS a VM running on hyper-v. It simply uses a custom kernel optimised for it and the cherry on top of the sunday : you can run gui apps natively (windows 11) with WSLg which uses wayland/xwayland