I think you can pause a virtual machine while it is in any state. Some states (such as during boot or in a UEFI app) don't have the notion of sleep or hibernate and yet you can still pause them. This also applies to OSes that don't support sleep or hibernate. Therefore, Parallels is not using sleep or hibernate.
Like in OSX when you click the red close button on the windowed windows VM, what does that trigger in windows?
Hello @JohnA42 , Thank for reaching out. To get acquainted with different virtual machine states, we would advice to go through this public article: https://kb.parallels.com/123111 Thank you.
When you suspend a virtual machine: Its current state (including the state of all applications and processes running in the virtual machine) is saved to a special file on your Mac (inside virtual machine's bundle). Virtual machine's process is stopped, therefore host RAM and CPU are freed from VM activity. When the suspended virtual machine is resumed, it continues operating at the same point the virtual machine was at the time of its suspending.
I think you can pause a virtual machine while it is in any state. Some states (such as during boot or in a UEFI app) don't have the notion of sleep or hibernate and yet you can still pause them. This also applies to OSes that don't support sleep or hibernate. Therefore, Parallels is not using sleep or hibernate.