It looks like WSL2 blocks any communication from linux going to localhost. That’s causing lots of problems with other applications as well, not just Local. I went through getting my workflow working from WSL2 this past week and wrote about it here: https://anchor.host/local-lightning-and-upgrading-to-wsl2/. Hope this is helpful.
So Local manages the WordPress sites on the Windows site under C:\Users<user>\Local Sites. I run all of my CLI commands using WSL using the equivalent \mnt\c\Users<user>\Local Sites. I use Composer lightly for a some plugin development which seems to work fine over WSL.