In the latest Parallels Desktop 20.2.2, with WSL correctly installed (on an Intel Mac), there seems to be a glitch in the Windows file manager: there, as we know, a "Linux" entry is created by WSL in the sidebar, and this should normally open an "Ubuntu" folder with the Linux file system inside; while, with the latest Parallels Tools installed, the Linux entry in the sidebar strangely points to the Parallels Shared Folders (i.e., the shared Mac files): a glitch which doesn't happen without the Tools, so those are probably responsible for this odd behaviour.
... And another small glitch with the latest Parallels Tools for Windows is that the "Mac" folder now doesn't appear anymore by default at the root of the C drive: bug or feature? Who knows...
Unfortunately, I cannot verify this anymore, as I switched to an Apple Silicon Mac: which currently means no WSL 2.
... BTW, it would be great if Parallels 21+ supported nested virtualization, also in Windows 11 for ARM guests.
There is a feature request for that here: https://forum.parallels.com/threads/nested-virtualization-on-apple-silicon.363820/
