Terminal is brand new and early in its development. That said, it's also improving very quickly and is now the daily driver command-line experience for many.
WSL, esp. WSL2 provides Windows users with many features that they have lacked for years, including a very/fully compatible Linux environment running alongside their Windows apps and tools. WSL enables users to seamlessly access files in their Windows filesystem, and for Windows to access files within each distro. It's also easy to invoke Linux commands from Windows and Windows binaries & tools from within Linux distros running on WSL.
It's far from a "funny halfway-house" - it's a very real and highly productive environment for anyone who needs to use Windows and Linux tools at the same time.
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