Hello,
Nested virtualization on M1 Macs is primarily a hardware limitation of the M1 chip rather than a software limitation that could be resolved through a simple update from Apple or Parallels.
The M1 chip, based on the ARM architecture, does not natively support nested virtualization.
Nested virtualization on M1 Macs is not supported due to the hardware limitations of the M1 chip. However, it's worth noting that hardware capabilities and software advancements may evolve over time, so it's always recommended to check for the latest updates and announcements Parallels regarding virtualization features on M1 Macs by subscribing to this article:
https://kb.parallels.com/en/125195
Thank you.