Earlier quoted context omitted.
Since WireGuard is Layer 3, what would is everyone's use case of doing Layer 2 on it? Or, what can it improve over existing solutions? I have tried to do the same for a bit while still learning networking, but ran into Layer 3 limitations.
Probably the most common use case is letting Avahi/Bonjour/etc. or DHCP work across a tunnel.
However, it normally does rely on multicast. Rather than trying to bridge broadcast domains (which is going to cause performance issues), a more efficient option is to setup an Avahi mDNS reflector on either end of the tunnel to rebroadcast mDNS packets.
See, for example: https://www.reddit.com/r/WireGuard/comments/g80bxf/comment/h...
Alternatively, there's also a Wide-Area Bonjour service that works over unicast and doesn't need any special packet forwarding, provided you run a Bonjour-aware DNS server:
http://www.dns-sd.org/serversetup.html
https://help.dyn.com/bonjour-and-dns-discovery/
(More generally, Layer 2 tunnels are best avoided unless you really need them for something arcane, like IPX or NetBIOS.)