Distributed tracing allows you to correlate operations and track requests between services from end to end. This is especially useful for durable functions because you are building applications that coordinate components of different systems.
You can use distributed tracing v2 with any of the supported durable Functions language SDKs and storage backends.
Distributed tracing v2 is also compatible with applications using Durable Task Framework, the underlying C# OSS framework that powers durable Functions.
For more info, see blog post.