[RESOLVED] Can't use Apple ID for macOS VM on Apple Silicon / MacBook Pro M3

same here: parallels 20.2.0, macOS 15.1.1 on host and macOS 15.1.1 in VM.
After <enter> on Apple ID password I get "An unknown error occurred".

 

The macOS Sequoia VM is useless because all I get are repeating dialogs that the
User name or password is incorrect
No menubar, no dock, and it's userless.

 

I an on 2.6 GHz 6-Core Intel Core i7 and cannot use the VM due to the constantly appearing modals that the user name or password is incorrect. It is not.