Rancher Desktop and error message for wsl1 is not accurate and dev.containers.executeInWSL enabled

• VSCode Version:Version: 1.97.2 (user setup)
  Commit: e54c774e0add60467559eb0d1e229c6452cf8447
  Date: 2025-02-12T23:20:35.343Z
  Electron: 32.2.7
  ElectronBuildId: 10982180
  Chromium: 128.0.6613.186
  Node.js: 20.18.1
  V8: 12.8.374.38-electron.0
  OS: Windows_NT x64 10.0.26100
• Local OS Version: Windows 11 business 26100.3194
• Remote OS Version: using quay.io/jupyter/pyspark-notebook
• Remote Extension/Connection Type:

• Dev Containers - 0.397.0
• WSL
• wsl -v
  WSL version: 2.3.25.0
  Kernel version: 5.15.153.1-2
  WSLg version: 1.0.65
  MSRDC version: 1.2.5620
  Direct3D version: 1.611.1-81528511
  DXCore version: 10.0.26100.1-240331-1435.ge-release
  Windows version: 10.0.26100.3194

Rancher Desktop: 1.18

• Logs: no logs are getting output after searching all output under:

Steps to Reproduce:

1. Install Rancher Desktop
2. Open Folder with devcontainer.json (specific devcontainer.json provided below)
3. Invoke option to Open Folder in Container

After invoking Open Folder in Container, I get this error message:

if I disable this setting (dev.containers.executeInWSL), opening the folder in container works

{
	"name": "pyspark",
	"image": "quay.io/jupyter/pyspark-notebook",

	// Set *default* container specific settings.json values on container create.
	"customizations": {
		"vscode": {
			"settings": { 
				"terminal.integrated.shell.linux": "/bin/bash"
			},
			"extensions": [ "ms-python.python", "ms-python.vscode-pylance", "eamodio.gitlens", "ms-toolsai.jupyter", "GitHub.copilot","GitHub.copilot-chat","VisualStudioExptTeam.vscodeintellicode" ]
		}
	},

	// Use 'forwardPorts' to make a list of ports inside the container available locally.
    "forwardPorts": [8888,4040],

	// Uncomment to use the Docker CLI from inside the container. See https://aka.ms/vscode-remote/samples/docker-from-docker.
	// "mounts": [ "source=/var/run/docker.sock,target=/var/run/docker.sock,type=bind" ],

	// Uncomment when using a ptrace-based debugger like C++, Go, and Rust
	// "runArgs": [ "--cap-add=SYS_PTRACE", "--security-opt", "seccomp=unconfined" ],

	// Comment out connect as root instead. More info: https://aka.ms/vscode-remote/containers/non-root.
	"remoteUser": "root"
	// this is the user defined in the jupyter container
}

Does this issue occur when you try this locally?: Yes
Does this issue occur when you try this locally and all extensions are disabled?: Yes