Fullscreen mode occupies only portion of the laptop screen space

Hi, I've checked many threads regarding different issues with fullscreen mode with windows running on parallels.
My case is different to all of the threads I was able to find on this forum.
My problem is that full screen mode doesn't occupy full laptop builtin screen space.
This happens on mbp16 m1 max with Parallels 17.1.1 running win11 arm64.

Screenshot attached for clarity.

 

Technical report id for this issue: 389230612