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Maybe just in the USA. But also Microsoft is on Google's side here. Also doesn't Microsoft's WSL also have this problem as a "reverse WINE" ?

Except Linux is FOSS so Microsoft has a license to do it.

Only under Linux's GPL license, WSL is most definitively not under GPL

Is it possible to make WSL a GPL software without making entire Windows a GPL software?

Yes, GPL defines some boundaries but as long WSL acts as stand-alone software and Windows doesn't link against it that's allowed.