I failed to run SmartGit within WSLg, so I tried out GitKraken and it worked.

Anyway, that's just a workaround. A valid solution would be something like VSCode or phpstorm: installed on windows with something running in WSL to prevent any perf loss

I ended up using GitKraken installed within WSLg and it works like a charm!

Any update on this topic?

Using smartgit with WSL2 is so painfully slow...