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Is the VM running arm64 or amd64?

arm64

Otherwise it would be emulation not virtualization. Parallels on Apple Silicon only works with arm64 VMs.

But that's pretty much everything I care about. I have Windows 11, FreeBSD, OpenBSD, several Linux distributions. They all work fine.

I thought M1 silicon could run amd64/x86_64 efficiently via Rosetta, due to changing the memory ordering model to an x86 one. I was hoping that Parallels could somehow take advantage of that.

Yeah I don’t think it can do that, unfortunately.

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