UTM had me at “here’s a pre-built Solaris image”.

It’s also how I sadly learned that M1/M2 chips don’t support nested virtualization. So no WSL on Windows on Arm under Mac OS Ventura. At least I could never get it to work.

You are correct, no nested virt support on macOS or Asahi. The rumor is this could be coming eventually to Asahi on M2, and maybe a future macOS release - but until it actually does it's a pretty huge drawback of apple silicon that is rarely mentioned.

"huge"?

Am I missing something? I know of this limitation but I dont understand why would anyone need this. What's the goal or running Windows on Mac to run WSL on it?

Doing anything involving virtualization on Linux or Windows. This also applies to macOS vms, so you can't run Docker Desktop inside a macOS vm.