Cannot resize Windows

Windows build number:

Microsoft Windows NT 10.0.22621.0

Your Distribution version:

Kali GNU/Linux Rolling 2023.1

Your WSL versions:

WSL version: 1.1.3.0
Kernel version: 5.15.90.1
WSLg version: 1.0.49
MSRDC version: 1.2.3770
Direct3D version: 1.608.2-61064218
DXCore version: 10.0.25131.1002-220531-1700.rs-onecore-base2-hyp
Windows version: 10.0.22621.1413

Steps to reproduce:

1. Open firefox using firefox command.
2. Try to resize the window.
3. Notice that resize icon shows around all edges but only works on certain small spots.

WSL logs:

No response

WSL dumps:

No response

Expected behavior:

The window should be resizable from all edges.

Actual behavior:

The window can only be resized when resized from the small red marked areas. Note that the marked area gets offset by small amount after every resize.

Seemingly random parts of the edges start working sometimes after Window has been dragged to certain positions on screen.