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But is it actually a subsystem, or is just a fancy virtual machine with a nicer interface?

That's what WSL2 is, no?

Yes, and it is a misnomer compared to WSL1. WSL1 was a proper NT subsystem because NT was designed from the start to allow such things.

It's incorrect to draw parallels between Lima and WSL.

How is this different from Docker?

Seems closer to Multipass[1] with some nice extras like automatically shared volumes.

macOS Subsystem for Linux