These two parameters control where the Docker Desktop application itself, and the path the wsl2 distributions (that run the docker engine backend) are stored:
--installation-dir=<path> Changes the default installation location (C:\Program Files\Docker\Docker)
--wsl-default-data-root=<path> Changes the default wsl data location
Just pointing the installation dir to another drive isn’t that beneficial, as its size is just a handful of GB, though the wsl default data root that stores the Docker Desktop backend and data can easily grow from two to four digit GB consumption, depending on the usage.
If you want to use Windows Containers as well, you need to set these parameters as well:
--hyper-v-default-data-root=<path> Changes the default hyper-v VM disk location
--windows-containers-default-data-root=<path> Changes the default windows containers data root
Docker Buisness customers can additionaly leverage settings-management to preconfigure Docker Desktop during role out. Though, I haven’t seen it configure the above two parameters.