Edit: I looked it up. WSL2 continues to use a VM.
https://devblogs.microsoft.com/commandline/announcing-wsl-2/
No, the headline feature of WSL2 is it uses a real Linux kernel under a hypervisor, as opposed to WSL1's approach of a kernel driver running inside the NT kernel which partially emulates the Linux syscall API.
> Edit: I looked it up. WSL2 continues to use a VM.
More accurately, WSL2 starts using a VM, whereas WSL1 didn't. WSL2 runs the Linux kernel inside a VM. WSL1 runs Linux processes under the NT kernel (albeit as a special type of lightweight process called a picoprocess), with an emulation layer to translate Linux syscalls into NT kernel calls.
WSL was a translation layer between Linux and Windows, WSL2 uses Hyper-V (I believe with some special sauce to handle integration).