It's just that it's poorly integrated with the host environment (because there is a host environment). On Linux and Macs, the Unix side is the machine itself. With WSL1, you have a Windows kernel pretending to be a Linux one (I kind of prefer this approach) but my home folder is not my Windows home folder, but terminal still opens the Windows home anyway. On WSL2 (which I can't use on my corporate laptop because the VPN software breaks something in DNS and networking I haven't had the time to debug) the Windows side needs a network share to get access to the WSL environment (which is not present until the environment starts - and there are other side effects whether WSL starts before the VPN or after).
A Linux box (or Mac) is a so much simpler (to understand what happens) Unix environment it's not even funny.
Having said that, when you overcome those impedance mismatches, it mostly works for the typical use cases. Like you mentioned, Docker works (I need to set a DOCKER_HOST variable to point to the Windows box). And Windows Terminal is excellent (double height and width chars are still missing, but they have overline support).
It's death by a thousand paper cuts.
I finally gave up on it and went back to using my underpowered OSX machine instead of continuing to try to get WSL2 to do the job.
Was it possible? Probably. But I'm not going to spend the time to figure it out. There's probably a correct way to install everything we needed, but I didn't find it, and I found numerous wrong ways.
I am genuinely interested on knowing your reasons for saying WSL is terrible. Just for clarification, I'm a Linux/MacOS user but the times I've had to use WSL in the past whether experimenting at home or in some companies where I was force to use Windows, I though it is actually one of the most decent things Microsoft has created on its entire existence. It is easy to enable, to operate, it integrates well with the network stack of Windows (kubectl port-forwarding or docker run -p8000:80 works out of the box) it performs very decently (with exceptions on IO filesystem operations) etc.