Windows 11 VM on Parallels has broken virtual TPM.

Same behaviour on an Entra joined W11 on ARM VM running on MacBook Air M3 and Parallels Desktop Standard 26.4.0.
After the July update, the first thing I noticed was that there was a problem with the PIN service, I had to enter my password instead.
Then BitLocker started to pop upon each device start. Then the TPM/vTPM rabbithole begun.
I deleted the VM, made a new one, also fails, removed/recreated the chip in VM settings, deleted in Keychain. Nothing.