I should've checked the forums before deleting my Windows VM. I had the same experience but thought it was because I had installed Windows updates. The issue is definitely just that it isn't updating the display. If you launched something but don't see it on screen, you can resize the screen a bit and it will refresh and show your app. I found the "reinstall parallels tools trick" too but the fact that it fails after reboot didn't seem super helpful, but I guess it's fine to experiment with for now.