https://www.kali.org/docs/wsl/win-kex/
https://gist.github.com/MooreDerek/23686fc29a22d4e1e88e3dd9055fbb07
This is easily fixed by pulling from http rather than https
https://superuser.com/questions/1644520/apt-get-update-issue-in-kali
Yes, there appears to be issues with Kali Linux WSL (not downloaded from Microsoft Store).
The Kali archive keys appear to be missing and cannot be installed using apt-add key since it relies on GnuPG, which cannot be installed using apt, since the signatures cannot be verified.
The best solution is the one submitted by Jim which installed the Kali archive keys from a Debian package. Once this is done apt update and apt upgrade will work.
Download the Debian package for the Kali archive keys
> wget -O kali-archive-keyring_2020.2_all.deb https://http.kali.org/kali/pool/main/k/kali-archive-keyring/kali-archive-keyring_2020.2_all.deb
Install the Kali archive key package
> sudo dpkg -i kali-archive-keyring_2020.2_all.deb
Update list of available packages from Kali repo
> sudo apt update
Upgrade the WSL system
> sudo apt full-upgrade