I discovered you can use the “diskpart” tool to compact a VHDX. This allows you to shrink a WSL2 virtual disk file, reclaiming disk space. It appeared to work for me without any data corruption, taking the file size down from 100GB to 15GB. (source)

I adore Parallels “reclaim disk space” feature. Just the other day, I got back 70GB off my Windows Guest in a breeze. I’m coming from VirtualBox, where reclaiming disk space is a significant pain. I would expect optimize-vhd to achieve the goal with WSL2, but it’s nice to know there are alternatives, like Stephen’s above