macOS Catalina 10.15 Guest VM won't update and hangs forever

I'm using a macOS Catalina vm guest for heavy application testing. Since some Parallels Desktop releases back (I think 16) the Apple macOs Update inside this guest isn't working properly. I found a description of the problem in the knowledge base https://kb.parallels.com/124705
There it is stated that you should reset the machine to overcome the problem. Well, it doesn't help me at all. The catalina guest won't update. The update process just stucks forever although you can interact with the vm normally. Resetting or not.
If I am trying to list the macOS software updates with the help of the command line and softwareupdate tool : sudo softwareupdate -l
I won't even get anything back in stdout. Very strange.

Host HW is an Intel Apple Mac Book Pro 16'' (2019) running macOS Monterey 12.6.1. / CPU 2.3 GHz 8-core Intel Core i9 / 16 GB RAM/ 1 TB SSD
Parallels Desktop 18 Pro for Mac - Version 18.0.3 (53079)

Someone came across the same problem? Maybe similar problems with Big Sur/Monterey guests? Any help is appreciated. Thanks.

 

I've tried now 3 times to update a guest macOS Catalina under Parallels 20.1.2, only to have it hang with "About one minute remaining...". I guess I'll just trash the VM and recreate it from the image in the App Store. FWIW, I'm using a late 2017 MBP running macOS Ventura 13.7.1

 

FWIW, installing Catalina on a guest VM yields some error text on installation (see attached pic)