BigSur Parallels 16.5 not possible to update Win10 (21H1)

ArkadiuszR

Bit poster
Hello, I am struggling with upgrading my 1903 Windows release to the latest one for several months now.
After several update tool versions I have finally dowloaded 21H1 ISO and started upgrading from it. Unfortunately again no luck.

The problem pops up after second restart, and installer roll back changes with following status.
0xc1900101 - 0x20017 INSTALLATION FAILED IN THE SAFE_OS PHASE WITH AN ERROR DURING BOOT OPERATION

I have disabled defender, do not have any other antivirus app installed, I have no other drivers apart Parallels ones.
 
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