Stored in your %UserProfile% directory.
Used to configure settings globally across all installed Linux distributions running as the WSL 2 version.
Can be used only for distributions run by WSL 2. Distributions running as WSL 1 will not be affected by this configuration as they are not running as a virtual machine.
To get to your %UserProfile% directory, in PowerShell, use cd ~ to access your home directory (which is typically your user profile, C:Users<UserName>) or you can open Windows File Explorer and enter %UserProfile% in the address bar. The directory path should look something like: C:Users<UserName>.wslconfig.