I have found out today that you can’t enable automatic login and can’t use an enhanced session within hyper-v.

Even if you enable enhanced session in powershell using cmdlet:

Set-VM "Ubuntu" -EnhancedSessionTransportType HVSocket

The session will only connect natively, which will result in no scaling abilities and poor video performance.

Auto login is not supported as an enhanced session is possible through an alternative xrdp login

The secret therefor is to toggle off autologin, if you have enabled it. This can be done in the user settings: