Issue:
Windows Subystem for Android (WSA) is unable to run any apps and there is no splashscreen (when opening the Files app from the settings) and no icons for Android apps.
Why this occurs is unknown. However, after multiple attempts trying to fix this issue, a solution was found.
Issue.mp4
Rename the extracted folder to a shorter name, which can be anything to your choosing.
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Before: WSA_2XXX.XXXXXXX_XXXX_Release-Nightly-with-magisk-XXXXXXX-XXXXXX-MindTheGapps-XX.X-RemovedAmazon
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After: WSAArchive2XXX
Solution.mp4
Hope this works for you!