Environment

WSL 2 on Windows Server Preview Build 20262 (Windows Server 2019 Datacenter)
but is applicable to all (server?) preview builds ever since flighting changed to the "fe_release[_server]" branch, so 20246+

Steps to reproduce

Run any WSL 2 related command like for example wsl --set-default-version 2 or wsl --set-version Ubuntu 2 or try to run Docker Desktop with the WSL 2 backend.

Expected behavior

Command executes successfully.

Actual behavior

Commands just result in the same output as wsl --help shows.
Noting that it does NOT output Invalid command line option: <options> in first line, but in fact only the usage info as in wsl --help.
Docker Desktop with WSL 2 backend startup also fails showing the same output (wsl --help) as error.

Additional links

Related discussion: https://techcommunity.microsoft.com/t5/windows-server-insiders/wsl-2-not-working-after-installing-20262/m-p/1928823