Environment

Microsoft Windows [Version 10.0.21327.1010]
(c) Microsoft Corporation. All rights reserved.
Fedora 34 self-installed but works in Ubuntu in the same way. This the Kernel issue.
WSL2
WSL Kernel Linux MSI-wsl 5.4.91-microsoft-standard-WSL2

Steps to reproduce

1. Install systemd based distro like Ubuntu, fedora33remix,
2. Edit .wslconfig and add systemd.unified_cgroup_hierarchy=1
3. Start and attach to the running distro using WT
4. do ls /sys/fs/cgroup/ - both /sys/fs/cgroup/systemd (V1 hierarchy) and /sys/fs/unifued (V2 hierarchy) are presented. /sys/fs/cgroup/ are polluted with cgroup controllers The systemd.unified_cgroup_hierarchy=1 is missinterpreted.
5. Install any recent OCI runtime version: RunC, CRun), Docker 20.10 daemon, Podman 3
6. Do Podman, .. info - Unified cgroup hierarchy is not recognized and cgroup V1 is shown due to /cgroup/systemd presence.

Only cgroup V2 hierarchy is built because the "mixed" setup has been prohibited as a dead-end. The recent runC ( Docker 20.10) and cRun switched to support cgroup V2 . It is necessary for rootless user mode, so important for WSL users.
The conversion between mixed mode and cgroup V2 is not supported anymore because of mentioned above reasons.

WSL logs:

Expected behavior

Only cgroup V2 hierarchy is created: /sys/fs/cgroup/unified/ and all controllers are put into the correct place.

Actual behavior

/sys/fs/cgroup is polluted with the random content like controllers and systemd folder

ls /sys/fs/cgroup
blkio cpu,cpuacct cpuset freezer memory net_cls,net_prio perf_event rdma unified
cpu cpuacct devices hugetlb net_cls net_prio pids systemd

Please, correct to allow upgrade Docker and Podman to the recent releases and working as a rootless user. This is also a security issue because WSL root user has unlimited access to the Windows program Files and program Data directories, i.e. can inject any malicious executive into Windows and run it as MyVirus.exe .