Parallels Desktop 15 for Mac Pro Edition Ubuntu 18.04 Linux guest OS VM In Configure->Options->More Options: Authenticate with macOS SSH public key and Set VM name as guest OS hostname seem to have no clear function, have no effect or doesn't work properly. What's their function? Are they intended for Windows guests only? Also, they are documented only in the Parallels Desktop 13 user's guide. No mention of them in Parallel Desktop 15 user's guide even though the options are still available.
It only works when you SSH into your VM, rather than using the GUI login. (If it still works.) Parallels sets your login credentials so it makes sense to have this option. On the Mac, you would first need to do the usual steps. Generate a key with ssh-keygen -t rsa