My VM was also suspended. I also couldn't change from the Parallel's Hypervisor to Apple, as I needed to start the VM to make configuration changes, and my Mac crashed the moment I tried to start the VM. Customer support gave me the following method to change the Hypervisor type without starting the VM, which worked and allowed me to use Parallels 16.0 on Big Sur 5.
1. Locate the virtual machine's file as described in this article:
https://kb.parallels.com/en/117333
2. Right-click on it > Show Package contents.
3. Inside you will see a config.pvs. Right-click config.pvs > Open with TextEdit.
4. Inside of it find (CMD+F) the following part:
<HypervisorType>0</HypervisorType>
and change it to
<HypervisorType>1</HypervisorType>
Save the changes.
5. Run Parallels Desktop. Run the virtual machine. If prompted to reset the virtual machine, do it.
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