Can't set default WSL version while installing WSL2
So what's the problem? How can I finish WSL2 installation? What am I doing wrong?
Your system is out of date. You don’t have the appropriate cumulative update installed. You have to install KB4574727 in order to enable this feature.
This backport has the minor build number: 1049. To summarize, if your minor build number is 1049 or higher on Windows builds 18362 or 18363, then you have the backport and the ability to run WSL 2 distros.
Source: WSL 2 Support is coming to Windows 10 Versions 1903 and 1909