Check the preinstalled software on the default microsoft hosted images; let's see what's on the the current windows-latest for example:

you'll notice that both WSL and Docker are installed. But there are at least 2 problems for you:

• at the bottom of the page you can see that the cached docker images are all windows based

• the WSL installed is version 1, incompatible with recent versions of virutalization environments

You could try to setup a step that updates WSL to v2 and then a command to switch to linux based virtualization for docker. But that's gonna cost you pipeline execution time, and given the particularly pricy costs of Azure, i'd suggest another way;

You could try and use the new windows-2025 image for this pipeline, that comes preinstalled with Docker and WSLv2 as default;

Theoretically this new image has been created specifically to resolve your problem, which is in line with Micro$oft moving towards the windows server + containerized linux services model