For a single container the difference depends on your exact setup. I typically run docker in the same WSL instance as my other wsl stuff, so starting a single docker container adds 0 additional VMs, while starting the container as a wsl instance will add one VM. If you use the "docker for windows" package you may be adding a VM just for running docker, depending on your setup.
Once you start the second container the difference becomes more obvious: running $N containers in docker uses one VM with one linux kernel, no matter how many containers you add. Running $N containers as separate WSL instances runs $N VMs and $N linux kernels. That's the "bit more overhead" I was referring to
"Running $N containers as separate WSL instances runs $N VMs and $N linux kernels."
But it doesn't, and this is what I'm disagreeing with.
If you instantiate WSL2, it launches a Linux VM. A single Linux VM. If you then run Docker with WSL2 integration (the default and hugely recommended), it uses that Linux VM as its VM as well, so you're still at 1 VM.
If you run 100 WSL2 instances, they will all use that single Linux VM, each doing namespacing for isolation with their own filesystems. If you run 100 Docker instances, they will all use that single Linux VM.
If you run 100 WSL instances, and 100 Docker instances (assuming, again, WSL2 integration which is the default), they will all be using that single Linux VM.