`sf project deploy start` hangs very early on

Start by reproducing sf project deploy start with the command and Docker/WSL2 environment described, then compare the telemetry setup point with the diagnostic results, especially the failed v2 crypto support check. Done means identifying why the command stops after telemetry initialization and documenting or fixing the hang with a reproducible verification.

Expected result

When running sf project deploy start, the command seems to hang:

sf project deploy start --api-version 63.0 --ignore-conflicts --manifest /app/scripts/ci-deployment-files/package/package.xml --dev-debug --target-org [email protected] --json
  sf:telemetry Usage acknowledgement file already exists +0ms
  sf:telemetry Using telemetry logging file /tmp/sf-telemetry/telemetry-04dbb7d5df9092d6b4c31014f737e23135f3c4b8.log +1ms
  sf:telemetry Setting up process exit handler +14ms

Actual result

In a CI context, this never happens, however when I run the script locally via docker, the hanging occurs.

Additional information

System Information

{
  "versionDetail": {
    "architecture": "linux-x64",
    "cliVersion": "@salesforce/cli/2.86.9",
    "nodeVersion": "node-v18.20.8",
    "osVersion": "Linux 5.15.167.4-microsoft-standard-WSL2",
    "rootPath": "/usr/local/lib/node_modules/@salesforce/cli",
    "shell": "bash",
    "pluginVersions": [
      "@oclif/plugin-autocomplete 3.2.27 (core)",
      "@oclif/plugin-commands 4.1.24 (core)",
      "@oclif/plugin-help 6.2.27 (core)",
      "@oclif/plugin-not-found 3.2.49 (core)",
      "@oclif/plugin-plugins 5.4.36 (core)",
      "@oclif/plugin-search 1.2.23 (core)",
      "@oclif/plugin-update 4.6.38 (core)",
      "@oclif/plugin-version 2.2.27 (core)",
      "@oclif/plugin-warn-if-update-available 3.1.38 (core)",
      "@oclif/plugin-which 3.2.34 (core)",
      "@salesforce/cli 2.86.9 (core)",
      "apex 3.6.13 (core)",
      "api 1.3.3 (core)",
      "auth 3.6.113 (core)",
      "data 4.0.27 (core)",
      "deploy-retrieve 3.22.4 (core)",
      "info 3.4.54 (core)",
      "limits 3.3.52 (core)",
      "marketplace 1.3.8 (core)",
      "org 5.7.3 (core)",
      "packaging 2.13.1 (core)",
      "schema 3.3.59 (core)",
      "settings 2.4.24 (core)",
      "sobject 1.4.55 (core)",
      "telemetry 3.6.38 (core)",
      "templates 56.3.45 (core)",
      "trust 3.7.83 (core)",
      "user 3.6.18 (core)",
      "sfdmu 4.38.0 (user)",
      "sfdx-browserforce-plugin 4.7.0 (user)",
      "sfdx-git-delta 6.5.1 (user)"
    ]
  },
  "sfdxEnvVars": [],
  "sfEnvVars": [
    [
      "SF_SP_SITE_ID",
      "pinkuniversity.sharepoint.com,821a96fb-efc4-4bbe-b529-59ea6195047a,c1dc1202-dee4-42a6-a21a-9694b39f5fb8"
    ],
    [
      "SF_AUTOUPDATE_DISABLE",
      "true"
    ],
    [
      "SF_DISABLE_AUTOUPDATE",
      "true"
    ],
    [
      "SF_UPDATE_INSTRUCTIONS",
      "Use \"npm update --global @salesforce/cli\" to update npm-based installations."
    ]
  ],
  "proxyEnvVars": [],
  "cliConfig": {
    "arch": "x64",
    "bin": "sf",
    "binAliases": [
      "sfdx"
    ],
    "cacheDir": "/root/.cache/sf",
    "channel": "stable",
    "configDir": "/root/.config/sf",
    "dataDir": "/root/.local/share/sf",
    "dirname": "sf",
    "flexibleTaxonomy": true,
    "home": "/root",
    "isSingleCommandCLI": false,
    "name": "@salesforce/cli",
    "nsisCustomization": "scripts/nsis.nsi",
    "platform": "linux",
    "root": "/usr/local/lib/node_modules/@salesforce/cli",
    "shell": "bash",
    "theme": {
      "bin": "blueBright",
      "command": "blueBright",
      "dollarSign": "green",
      "flag": "green",
      "flagDefaultValue": "blueBright",
      "flagOptions": "blueBright",
      "flagRequired": "red",
      "sectionHeader": "blue",
      "topic": "blueBright",
      "json": {
        "brace": "whiteBright",
        "bracket": "whiteBright",
        "comma": "green",
        "key": "blueBright",
        "string": "greenBright",
        "number": "blue",
        "boolean": "redBright",
        "null": "blackBright"
      }
    },
    "topicSeparator": " ",
    "updateConfig": {
      "node": {
        "options": [
          "--no-deprecation"
        ]
      },
      "s3": {
        "bucket": "dfc-data-production",
        "host": "https://developer.salesforce.com",
        "templates": {
          "target": {
            "baseDir": "<%- bin %>",
            "manifest": "<%- channel === 'stable' ? '' : 'channels/' + channel + '/' %><%- platform %>-<%- arch %>",
            "unversioned": "<%- channel === 'stable' ? '' : 'channels/' + channel + '/' %><%- bin %>-<%- platform %>-<%- arch %><%- ext %>",
            "versioned": "<%- channel === 'stable' ? '' : 'channels/' + channel + '/' %><%- bin %>-v<%- version %>/<%- bin %>-v<%- version %>-<%- platform %>-<%- arch %><%- ext %>"
          },
          "vanilla": {
            "baseDir": "<%- bin %>",
            "manifest": "<%- channel === 'stable' ? '' : 'channels/' + channel + '/' %>version",
            "unversioned": "<%- channel === 'stable' ? '' : 'channels/' + channel + '/' %><%- bin %><%- ext %>",
            "versioned": "<%- channel === 'stable' ? '' : 'channels/' + channel + '/' %><%- bin %>-v<%- version %>/<%- bin %>-v<%- version %><%- ext %>"
          }
        }
      }
    },
    "userAgent": "@salesforce/cli/2.86.9 linux-x64 node-v18.20.8",
    "valid": true,
    "version": "2.86.9",
    "warned": false,
    "windows": false,
    "_base": "@oclif/[email protected]",
    "_commands": {},
    "_topics": {},
    "commandPermutations": {
      "validPermutations": {}
    },
    "pluginLoader": {
      "options": {
        "root": "/usr/local/lib/node_modules/@salesforce/cli/dist"
      },
      "errors": [],
      "plugins": {},
      "pluginsProvided": false
    },
    "topicPermutations": {
      "validPermutations": {}
    },
    "nodeEngine": ">=18.6.0"
  },
  "pluginSpecificData": {
    "@salesforce/plugin-deploy-retrieve": [
      {
        "sourceApiVersion": "63.0",
        "targetOrgApiVersion": "63.0"
      }
    ],
    "@salesforce/plugin-auth": [
      {
        "isUsingGenericKeychain": false,
        "sfCryptoV2Support": false,
        "cryptoVersion": "unknown"
      }
    ]
  },
  "diagnosticResults": [
    {
      "testName": "salesforcedx plugin isn’t installed",
      "status": "pass"
    },
    {
      "testName": "you don't have any linked plugins",
      "status": "pass"
    },
    {
      "testName": "[@salesforce/plugin-trust] can ping: https://registry.npmjs.org",
      "status": "pass"
    },
    {
      "testName": "[@salesforce/plugin-trust] can ping: https://registry.yarnpkg.com",
      "status": "pass"
    },
    {
      "testName": "[@salesforce/plugin-trust] can ping: https://registry.npmjs.org/",
      "status": "pass"
    },
    {
      "testName": "using latest or latest-rc CLI version",
      "status": "pass"
    },
    {
      "testName": "[@salesforce/plugin-deploy-retrieve] sourceApiVersion matches apiVersion",
      "status": "pass"
    },
    {
      "testName": "[@salesforce/plugin-deploy-retrieve] sourceApiVersion matches default target org max apiVersion",
      "status": "pass"
    },
    {
      "testName": "can access: https://test.salesforce.com",
      "status": "pass"
    },
    {
      "testName": "can access: https://appexchange.salesforce.com/services/data",
      "status": "pass"
    },
    {
      "testName": "can access: https://developer.salesforce.com/media/salesforce-cli/sf/channels/stable/sf-win32-x64-buildmanifest",
      "status": "pass"
    },
    {
      "testName": "[@salesforce/plugin-auth] CLI supports v2 crypto",
      "status": "fail"
    }
  ],
  "suggestions": [
    "Check https://github.com/forcedotcom/cli/issues for CLI issues posted by the community.",
    "Check http://status.salesforce.com for general Salesforce availability and performance.",
    "using npm registry https://registry.npmjs.org/ from npm config",
    "Your current installation of Salesforce CLI, including all the plugins you've linked and installed, doesn't yet support v2 crypto. All plugins and libraries must use at least version 6.7.0 of `@salesforce/core` to support v2 crypto. You're generally still able to successfully authenticate with your current CLI installation, but not if you generate a v2 crypto key."
  ],
  "logFilePaths": [],
  "commandExitCode": 0
}