This sounds less like a Dragon Naturally Speaking issue and more like a conflict between Dragon's mouse-control commands and the way Parallels handles cursor integration through Smart Mouse and Coherence Mode.
What caught my attention is that Dragon is clearly moving the cursor--you can confirm that because clicks occur in the correct location--but the visual pointer isn't updating on screen. That suggests the cursor position maintained by the Windows VM and the cursor being displayed by Parallels have become out of sync.
I've encountered similar reports involving virtualization software where accessibility tools, remote desktop software, or screen-overlay utilities interact with a virtualized mouse driver. In many cases, disabling advanced mouse integration features temporarily restores proper cursor tracking, which seems consistent with your observation that turning off Smart Mouse makes the pointer visible again.
If I were troubleshooting this, I would test the issue in standard windowed mode rather than Coherence Mode, verify that the latest Parallels Tools are installed, and check whether the behavior changes with different Dragon mouse commands. That would help determine whether the problem is specific to Coherence Mode's cursor rendering.
Based on the evidence you've provided, I would lean toward this being a Parallels integration issue rather than a speech-recognition problem. Since Dragon is successfully executing the commands, the missing visual feedback appears to be occurring after the cursor movement is processed. You may have better luck searching Parallels forums or contacting Parallels support, as other users running accessibility software inside Windows virtual machines may have encountered the same cursor synchronization problem.