Steps to Reproduce:


EDIT:
When I tried changing my Windows ENV variables with 127.0.0.1, I wasn't able to access the daemon. So this is clearly the issue. Is there a way to change which hostname the extension use to connect so I can point it to localhost instead of 127.0.0.1?

Does this issue occur when you try this locally?: Yes
That's connecting into WSL with the Remote - Containers extensions...
Hi @aeschli, thanks for checking my issue.
The thing is that I don't want to connect to the WSL itself, I know I can use the Remote - WSL Extension to access files inside and do my development there, but I want to connect to a docker container that is running inside WSL. That's why I had to install docker-cli on Windows also.
@Drakota No problem, thanks for reporting, we'll look into it!
@Drakota You could try setting the DOCKER_HOST environment variable. Or if you also have the Docker extension installed, try setting the Docker Host setting. /cc @Chuxel