A re-paste of a comment I posted as a reply:
My belief is that the 99% use case of this is for running docker images.
Before this you could run docker on windows, but you had to create a "bizarre" tiny linux distro VM (100mb or so storage), and the docker on windows launcher would leverage that to provision and run the docker images. You had to dedicate ram to that VM to run your docker pool.
With this you can run docker images "natively", without a separate VM memory space, and due to the elf loader support they actually are running on windows itself.
I do not see this as a good alternative to traditional VMs.