Hello,
Currently, it is possible to install a macOS virtual machine on Mac computer with Apple M-series Chip only of the same macOS version as that installed on the Mac.
Hence, if you wish to create a macOS virtual machine with a different macOS version, it is necessary to create it on a Mac running that version, and then transfer the resulting .macvm file to the destination Mac.
More information on this is described in this article.
Thank you.