Azure Linux sets permissions of root directory to 0750 by default, preventing non-root users from logging in

[surfacepatterns]

Describe the bug
While creating an Azure Linux 3.0 WSL instance, I noticed that I couldn't log in as the default (non-root) WSL user I created as root. The error messages I received were only somewhat helpful:

sh-5.2# sudo -u danderson -i
sudo: unable to change directory to /home/danderson: Permission denied
sudo: unable to execute /bin/bash: Permission denied

I found the problem to be restricted permissions on the root directory:

sh-5.2# ls -lad /
drwxr-x--- 18 root root 4096 Aug  6 15:48 /

When I changed the permissions to 0755, things worked correctly:

sh-5.2# chmod 755 /
sh-5.2# sudo -u danderson -i
danderson [ ~ ]$

To Reproduce
Steps to reproduce the behavior:

1. Generate an AzureLinux 3.0 tarball.
2. Add the tarball to WSL.
3. Create a non-root user.
4. Attempt to use sudo to change to that user

Expected behavior
I expect to be able to change to a non-root user.