How to Fix WSL2 Disk Space Bloat

This morning when I hopped online for work I was greeted with a murder mystery. For some unknown reason, my WSL2 Ubuntu installation had eaten over a third of my 1 TB disk space even though the actual content within the distro was less than 10 GB:

PS C:\Users\me> wsl --list --verbose
  NAME              STATE           VERSION
* Ubuntu            Stopped         2
  docker-desktop    Stopped         2
PS C:\Users\me> wsl --system -d Ubuntu df -h /mnt/wslg/distro
Filesystem      Size  Used Avail Use% Mounted on
/dev/sdc       1007G  9.8G  946G   2% /mnt/wslg/distro

Turns out this happens because the virtual hard disk file used for this WSL2 Ubuntu installation had grown to 373 GB over time, but was not set to automatically shrink back down in order to reclaim unused space.

PS C:\Users\me> Get-ChildItem "$env:LOCALAPPDATA\Packages" -Recurse -Name "ext4.vhdx" | ForEach-Object { "$env:LOCALAPPDATA\Packages\$_" }
C:\Users\me\AppData\Local\Packages\CanonicalGroupLimited.Ubuntu_79rhkp1fndgsc\LocalState\ext4.vhdx
PS C:\Users\me> (Get-Item (Get-ChildItem "$env:LOCALAPPDATA\Packages" -Recurse -Name "ext4.vhdx" | ForEach-Object { "$env:LOCALAPPDATA\Packages\$_" })).Length / 1GB
372.947265625

The wsl2.exe program has an option, --set-sparse which, according to the program help text, should allow the disk space to be automatically reclaimed when set to true:

PS C:\Users\me> wsl --shutdown
PS C:\Users\me> wsl --manage Ubuntu --set-sparse true

However, running that command by itself did not immediately fix the issue on my machine. My guess was that some other background task or system reboot would normally kick off the auto compacting process, but I had work to do and was getting kind of impatient. So the actual way I ended up solving this was to un-set-sparse the distribution and use diskpart to manually compact the disk from within a terminal running as administrator:

PS C:\Users\me> wsl --shutdown
PS C:\Users\me> wsl --manage Ubuntu --set-sparse false
PS C:\Users\me> diskpart

Microsoft DiskPart version 10.0.26100.1150

Copyright (C) Microsoft Corporation.
On computer: MYLAP25

DISKPART> select vdisk file=C:\Users\me\AppData\Local\Packages\CanonicalGroupLimited.Ubuntu_79rhkp1fndgsc\LocalState\ext4.vhdx

DiskPart successfully selected the virtual disk file.

DISKPART> compact vdisk

  100 percent completed

DiskPart successfully compacted the virtual disk file.

DISKPART> exit

Leaving DiskPart...
PS C:\Users\me> (Get-Item (Get-ChildItem "$env:LOCALAPPDATA\Packages" -Recurse -Name "ext4.vhdx" | ForEach-Object { "$env:LOCALAPPDATA\Packages\$_" })).Length / 1GB
12.93359375

And just like that, poof, disk space cleared.

Case closed!