No idea how to fix the problem if the wsl distribution is not even starting.
Note: one oddity that immediately hits the eye: while the image size is 8.476GB, the container created based on the image has 257.8GB and volumes have 0gb. Looks like all the persistent data was written into the container file system. The persistent data is practically jailed into the container and lives with its lifecycle. The proper way would have been to map a volume into the container folder(s) that store the persistent data.