In my case, since using Parallels 14, in my Snow Leopard Server VM there was a small rectangular area in the middle of the VM window. It was transparent and almost invisible (the rectangle was a bit lighter in colour than what was covered by it, maybe 1 % or so). The cursor would respond to any object in that small area and change its cursor "icon" accordingly, but clicking didn't have any effect on an object in that area (no matter whether it was a file, link, some object in a layout software ...).
Googling for a solution didn't even bring up anyone reporting a similar problem. So for a long time I didn't know where this problem came from until today when I realised I could use Accessibility Inspector to investigate it. And AI revealed that it was prldragdrop that was "occupying" that small rectangular area in the middle of my VM window.
"killall prldragdrop", as suggested by the OP, fixed it for the moment. But as long term solution, after killing it, I actually zipped the binary and removed the original so when the VM is started it can't be executed in the first place:
Code:
killall prldragdrop
sudo zip /Library/Parallels\ Guest\ Tools/prldragdrop.zip /Library/Parallels\ Guest\ Tools/prldragdrop
sudo rm /Library/Parallels\ Guest\ Tools/prldragdrop
So far I didn't notice any difference in behaviour of the VM. If I should, I'll try using prldragdrop from an older Parallels version and see if that works.