It's an issue because Linux is a trademark. Microsoft cannot call something a "Linux something" without infringing a trademark, but they can say something is "for Linux" the same way third-party companies could market e.g., WordPerfect for Windows. Hence Windows Subsystem for Linux, mirroring the old Windows Services for Unix:

https://en.wikipedia.org/wiki/Windows_Services_for_UNIX

It's a subsystem instead of "services" because WSL1 really was an NT subsystem: a "kernel personality" that knows how to interpret Linux system calls just like the DOS and OS/2 subsystems of early NT.