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It looked like a could reproduce the issue, but I was running a recent dev version of Rancher Desktop and had switched back and forth between containerd/docker multiple times, and had Web Assembly support enabled. So I did a factory-reset, enabled tunneling network and WSL integration, and could no longer repro it.

Seems like the issue was related to the existing WSL environment that I had installed before installing Rancher Desktop. It was running a different server version of docker. These are the notes I made for my dev team's internal documentation: Troubleshooting • When installing Rancher Desktop with an existing WSL environment verify that the Windows and Ubuntu environments are running the same version • Run the following command in both a WSL Bash command line window and a Windows Powershell window ▪︎ docker info • You may output the result to beyond compare for easier comparison to ensure the following match: • Server -> Server Version • Server -> containerd version • Server -> runc version • Server -> Operating System -> Rancher Desktop WSL Distribution ▪︎ Server -> Docker Root Dir -> var/lib/docker • If version don't match you may need to upgrade the WSL Ubuntu version by following steps 1 & 2 ◦ Install using the apt repository