Tahoe Guest on Tahoe Host is completely broken?

Am I missing something? I just paid for Parallels 26 to try properly updating/creating a Tahoe 26.3 guest VM on my Tahoe Intel iMac 5K.
Both a new installation and my upgraded macOS installation are completely broken. Parallels Tools fails to install but when I try to do anything in Settings like Allowing the installation the VM acts like it's running on a 486 from 1985.
New installation also fails to install. I've submitted a support ticket but I can't even get into Settings withoout the whole VM just dying.
What is going on? I paid for this Parallels update and it's absolute junk. I've been using Sequoia and previous VMs perfectly up until now.

 

Here's a screenshot by the way. Nothing I do in Privacy settings works. Also in my upgraded VM I can't click the Password text box to type in my password..

 

I downloaded a slightly new build of Parallels for this supplied by support staff but that didn't do anything too. Tahoe guest VM is DOA for me on Intel host.