Full screen display issues on Apple Silicon (Windows 11 ARM VM)

Recently migrated from an Intel-based Macbook Pro to an Apple silicon Macbook Pro (M2 Pro).
Running Parallels Desktop Pro 19.2.1. Windows 11 ARM virtual machine
I like to use all my displays in full screen. Right now I have 2 external monitors along with the laptop display. The external displays are fine, however the laptop display is only showing me less than a quarter of the display (see attachment).
I thought maybe my Caldigit TS3 dock might have something to do with it. I took that out of the mix but no improvement.
Connected via thunderbolt to each of my external displays.
If I only use the laptop display (disconnect the external monitors), the full screen mode works fine on the Macbook Pro.
This same setup was working just fine on my Intel-based Macbook Pro.
I just discovered that if I move to full screen when on the Macbook display, it works fine. However, the primary screen is the Macbook display, which isn't what I want. Also, when I do this, one of the external monitors has the view shifted downward (see second attachment). There's a black border at the top and unable to fully see the start menu bar.
Any suggestions?