WSL2 trouble
For some reason the WSL2 integration in Visual Code broke. There were several bugs described, that this may happen if you change your default shell from bash to zsh.
bash: ./scripts/wslServer.sh: No such file or directory
The real issue was that for unknown reason WSL2 wasn´t able to access C:\ drive at /mnt/c/. Fixing this issue was to restart WSL2 in Powershell:
wsl --shutdown
wsl