Comment by hrunt

WSL3 is the app version. The underlying mechanism of how Windows runs Linux hasn't changed. The change from WSL to WSL2 was in that mechanism (WSL: run via syscall translation, WSL2: run via VM). This is an app change, so it covers the interfaces of how you can start running Linux code, but underneath the hood, it's still a kernel running within a VM.

The big addition here is the support for containers. The app now provides a simple way to run containers directly. Underneath the hood, there's still a kernel running on a VM, though. There's also some improvements to the filesystem layer, a kernel upgrade, etc.

This article[0] does a nice job explaining it.

[0] https://zenn.dev/yohakucode/articles/wsl3-wsl2-wslc-update