Any update on this? As it stands now (February 16, 2021), the following setup is NOT possible

* Host: Intel XEON 

* Host: Windows 10 20H2 

* Host: Windows Subsystem for Linux (a.k.a WSL2) enabled

* VM: Windows 10 20H2

* VM Run something that needs virtualization (like Docker). 

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The only way to restore the VM's ability to run docker is to completely disable WSL on the host. This is not an acceptable compromise. A developer should not have to choose between WSL and VMware

Can anyone here confirm if Parallels or VirtualBox is capable of nested virtualization when the host has either Hyper-V or WSL enabled?