Same issue, ran some experiments
TL;DR i can see all resolutions and control it from Ubuntu settings>Displays only if Parallel guest tools are NOT installed!!
seems like display is controlled by Parallel only after installing guest tools, also i can see that the option "More Space" in vm Graphics settings only give one more big resolution but you don't have all resolutions to choose from like the case before installing Parallel Tools!
I am using Ubuntu 20.04.02 LTS
Parallel Desktop Version 16.1.3 (49160)