Why windows commands are not working in vscode-insiders' terminal (error: <3>init: (632) ERROR: UtilConnectUnix:466: connect failed 111)

Question

• VSCode Version: 1.53.0-insider (x64)
• OS Version: Microsoft Windows [Version 10.0.21292.1010]
• WSL version: WSL 2
• distribution: Ubuntu-20.04