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Rust is out of the picture now.
I was able to reproduce the same error with a virtualenv created from default Python 3.8.10, default setuptools installed with it (44.0.0). The python env is what you get with a fresh Ubuntu 20.04 installation, with just the packages listed installed (setuptools, wheel, packaging) (not including the packages that the distro pre-installs with the python install).
https://gist.github.com/keithel/2b18e36471b46225ff005ceb84e6abaf#file-also-fails-from-a-venv-created-from-default-installed-ubuntu-20-04-python-3-8