WSL Update failed Docker Desktop stopped and crashes

The Docker status page mentions a Docker Desktop issue: https://www.dockerstatus.com/
And the following issue is linked from GitHub: Upgraded to wsl2 2.5.7.0 and Docker desktop for Windows 4.41.2 no longer starts · Issue #14801 · docker/for-win · GitHub

Could it be your issue as well?

Update:

This could also be related: Docker Engine stopped on Windows ARM