WSL2 can still communicate across file-systems, though it's not particularly advised. For that specific task WSL1 is probably faster.

Its fine for most day to day tasks, for example I have a simple "~/d" symlink to my windows "Downloads" folder that I can use to fetch files I've downloaded in windows Chrome.

It's serviceable for one-offs, but you can't do any really high throughput stuff with that since it's going through a network protocol. For example you really need to keep your git repos on the WSL fs, rather than in the Windows tree. The upside is that they thought about it and Visual Code integration is seamless.

Luckily most of my is pretty segregated - either its all on Linux or all on Windows.