I’m on WSL2 with windows as well, slightly different error where git was unable to clone with a remote ref missing error.
An update went out for me yesterday, and it started working. Looks like Version 1.0.0 was the issue, the update after that worked was on Version 1.1.3
Make sure also github is logged in and authorized in the background agent page in the cursor website. (different from the IDE github integration). That seemed to do the trick