Again, Windows 11 works perfectly in Parallels. Been running it for a few days now. I'm on the developer preview build. There are some apps here and there that aren't supported on Windows ARM (yet), but most of my apps seem to work. My advice so far though would be ... save a screenshot of your system working in Parallels before you install a new app ... restart the VM ... and see if you get either a blue or green screen. If you do, roll back the snapshot and don't bother with that app until it gets support. 90% of my apps work having done this process. Was having a lot of headaches at first. The biggest culprits seem to be apps like Macrium, Acronis, and other apps that install boot level drivers meant for AMD and Intel PCs.This is quite a blow for Parallels. Personally I am trying to move to MacOS but I depend on Windows only software... So my M1 Mini actually is mainly used for the Parallels W10 VM (which I also use to avoid installing non native software on Apple Silicon). I guess Windows 10 should be fine for a couple more years, but at this point I'll think twice about, for instance, buying a new Apple Silicon Mac with 32 GB RAM so that I can allocate 16 to the Windows VM. And the more I think about it, the more it makes sense. Microsoft does not want people to move to Macs and use Windows just for Windows only software at best....They want them to buy Windows devices, not Macs....
Also, Microsoft sucks for not having native support for M1s. It literally makes no sense.