Starting "code" from inside WSL2 waits eternally

[t12nslookup]

UPDATE: not really a Code issue.

Looks like WSL2 can't start any executable:

jadams@Temp046317:~/code/data-extract$ explorer.exe .
Terminated

jadams@Temp046317:~/code/data-extract$ ps -ef | grep -i explorer
jadams     908     8  0 10:59 pts/0    00:00:00 /tools/init /mnt/c/WINDOWS/explorer.exe .
jadams     912   726  0 10:59 pts/2    00:00:00 grep --color=auto -i explorer

• VS Code Version: 1.54.1 (user setup)
• OS Version: Windows 10 x64 10.0.19042

Steps to Reproduce:

1. Open up WSL (either in Terminal, or by directly opening "Ubuntu 20.02"
2. change to source directory
3. type "code ."

Does this issue occur when all extensions are disabled?: Yes

"Visual Studio Code" runs fine from the Windows start menu.

debug output from "sh -x code ."

jadams@Temp046317:~/code/data-extract$ sh -x "`which code`" .
+ [  = true ]
+ COMMIT=f30a9b73e8ffc278e71575118b6bf568f04587c8
+ APP_NAME=code
+ QUALITY=stable
+ NAME=Code
+ DATAFOLDER=.vscode
+ realpath /mnt/c/Users/jon.adams/AppData/Local/Programs/Microsoft VS Code/bin/code
+ dirname /mnt/c/Users/jon.adams/AppData/Local/Programs/Microsoft VS Code/bin/code
+ dirname /mnt/c/Users/jon.adams/AppData/Local/Programs/Microsoft VS Code/bin
+ VSCODE_PATH=/mnt/c/Users/jon.adams/AppData/Local/Programs/Microsoft VS Code
+ ELECTRON=/mnt/c/Users/jon.adams/AppData/Local/Programs/Microsoft VS Code/Code.exe
+ IN_WSL=false
+ [ -n Ubuntu-20.04 ]
+ IN_WSL=true
+ [ true = true ]
+ export WSLENV=ELECTRON_RUN_AS_NODE/w:WT_SESSION::WT_PROFILE_ID
+ wslpath -m /mnt/c/Users/jon.adams/AppData/Local/Programs/Microsoft VS Code/resources/app/out/cli.js
+ CLI=C:/Users/jon.adams/AppData/Local/Programs/Microsoft VS Code/resources/app/out/cli.js
+ WSL_EXT_ID=ms-vscode-remote.remote-wsl
+ ELECTRON_RUN_AS_NODE=1 /mnt/c/Users/jon.adams/AppData/Local/Programs/Microsoft VS Code/Code.exe C:/Users/jon.adams/AppData/Local/Programs/Microsoft VS Code/resources/app/out/cli.js --locate-extension ms-vscode-remote.remote-wsl
^C

[t12nslookup]

Issue resolved after Windows Update, as per the WSL ticket WSL#6656

This was not a VS Code issue