Windows 10.0.16299.334 Pro x64 en-us (current public release build with current cumulative update KB4089848 at time of issue).
Kali Linux installed through the Store on original release date, no problem observed (but not used much).
Other distributions (Ubuntu and Debian) working fine.
Today Kali Linux got updated through the Store, to version 1.1.2.0 released on 2/22/2018.

After update, launching the Kali Linux instance shows the following:
Installing, this may take a few minutes...
WslRegisterDistribution failed with error: 0x80070057
Error: 0x80070057 The parameter is incorrect.

Uninstalling and reinstalling Kali Linux package works.