Following on to#22756

setuptools 60 re-enabled their local copy of distutils:pypa/setuptools#2896

This apparently fails to set up paths that can find msbuild, so switch back the standard library distutils.

We had to set an additional ENV on azure to un-break CI. Do we need to document this change in the windows source install instructions as well? Or is it better to change how we are using setuptools/distutils?