I'm using a windows 11 ARM VM on M3 Macbook Air 15" with external keyboard/mouse (apple magic w/touch id) and external display (ASD). I'm having issues with keyboard input which has a noticeable lag when typing inside the windows VM. The lag goes away if I assign the keyboard USB device to the VM (thus making it unavailable on the host MacOS). This makes frequent switching from MacOS<->Windows 11 VM cumbersome. I also tried enabling "game mode" for the keyboard from Parallels settings, and also tried always keeping keyboard connected via thunderbolt -- still the lag remains unless I assign the keyboard USB to the VM. I see this issue reported since Parallels 18.x times but I'm seeing this issue even with the latest Parallels Version 20.1.0 (55732). Is there an ETA for the fix?
The workaround (until the issue if fixed, if it is at all) is to go to System Settings/Keyboard and then turn Key repeat rate off.