Here's what I did.
Go to wsl, setup your project and create the virtual environment file "env"
Inside wsl, use command `code .` to open vscode from wsl (no need to activate the virtual environment yet)
Once your vscode window showed up, change the path of Python Interpreter to the one listed under the virtual environment file "env" Screenshot of the Python Intepreter setting
Now press the debug button vscode, it should be able to load the virtual environment
Here's my launch.json file Screenshot of launch.json