I believe, without any proof, that this is why they had to redo their rings and what they meant shortly after.
Then there is everything else people have mentioned, with them being completely reliant on Amazon's store but requiring "something" where most of the apps that are on Amazon's mobile store weren't available.
Without Play Store it's not viable/interesting. Also, it's so. much. work. keeping up with Android releases, even inside Google. Wear and ChromeOS are always a version or two behind, and vast majority of the time, it is two versions.
If Google internally wasn't helpful enough to each other, I can't imagine they played nice with Microsoft on this.
The broad business war means there's no incentive for VPs to drive it.
Technical challenges via CTS* mean there's no incentive for 1-3 steps up the org chart to enable it.
The narrow-er business challenge of not having the Play Store is the final nail for any cooperation. I don't think Google is interested in proactively collaborating unless you do CTS.
* Android's CTS, compatibility test suite, has to be passed to get the Play Store, and broadly, it is organized around individual device launches, rather than a subsystem than can run on any hardware.
(n.b. I worked on Wear then Android at Google, 6 years total)
Just install a version of WSA that has the Play Store. Take Magisk along the way too because why not.
MS also is clearly bribing/paying for big apps to come to its Windows platform via the Windows store, so why bother with this Android middle-man that is all trouble? Eventually the big apps got to Windows Store and that's really all that matters to 90% of customers.
Everything about this project was doomed from the start. I think MS just has given up on apps and mobile and leaves that to Apple or Samsung, who are now just caretakers for ios and android at this point and mobile becoming a low/no profit commodity in the long run, outside of payment processing.
wsl --install -d <Distribution Name>