This happened to me a long time ago with a prior version of Parallels, and it appears to occur again in the current version of Parallels (12.1.1). I shut down Windows 10, chose to reclaim disk space, and upon trying to boot the system back up it went into repair mode indicating it would take over an hour to recover. I trying to restore a time machine backup of the VM but so far every version of the backup is telling me the specified drive image "cannot be used as a virtual hard disk". For some reason my backups are corrupt and thanks to a problem with reclaim disk space so is my active copy.
By the way, I can't quit parallels because I'm getting an infinite loop of errors on the drive image...
I ended up being able to salvage an older copy of my VM, though I now have some work to do trying to set it back up to it's state before this issue occurred. I went ahead and made a copy of my VM and reclaimed disk space one more time to be sure. Upon booting the repairing prompt came back up... When I restored the copy I made before recovering disk space the system booted without problems. So this appears to confirm 100% that running reclaim disk space with parallels 12.1.1 on a Windows 10 VM will corrupt the system.
I gather this is a widespread problem with no guidance from Parallels on how to deal with it. So I just have this big honking VM file on my machine that could be 56GB smaller if I could actually slim it without corrupting the whole thing. So, no one is imagining this. I just make regular backups to an external drive and am waiting in hopes that there will be a solution to this forthcoming.
