WSL is VM. So it's pretty pointless to run application on Linux VM emulating WinAPI, indeed. But at least you don't need to care about licenses, that might be one reason.
IIRC also, MS can use the Windows HyperV infrastructure to run the Linux kernel too, like they do on Xbox One to segregate games "Exclusive" OS from apps "Shared" OS. In that sense it won't be user mode either like user-mode linux is.
My bet is on the latter.
https://en.wikipedia.org/wiki/Architecture_of_Windows_NT
https://en.wikipedia.org/wiki/Xbox_One_system_software
Enable-WindowsOptionalFeature -Online -FeatureName VirtualMachinePlatform