I have Parallels Pro 17.1.2. My Win 10 VM is up to date with updates. TPM is enabled, Secure Boot is on, BIOS is UEFI, all confirmed in the VM. PC Health Check says everything is ok (all requirements met) but Windows 10 upgrade says that the PC doesn't meet minimum requirements and I have no idea why that would be. Any ideas?
It seems you need to wait some random time before Windows Update recognises that things have changed! In my case after 3 days, it changed its mind and now says that it can run Windows 11.