They have been extremely successful with VSCode. I keep using emacs but nearly everybody I work with switched to VSCode. It even happened that a guy told me on a call "why doesn't your VSCode show [something]?" "Because emacs can show that but I don't care so I didn't install the package."

And yes, the people using Windows and deploying to Linux use WSL2 now instead of WSL. They used to run a Linux VM or dual boot. Another success for Microsoft. WSL2 can also run GUI applications. They'll end up controlling the Linux desktop.