macOS Monterey in Parallels on M1 Mac

I am running a macOS Monterey VM on my m1 mac, also running macOS Monterey, and for some reason my host firewall blocks all traffic to the VM.

Traffic is allowed to Parallels and Stealth Mode is disabled. I have a Win11 and Ubuntu VM as well that do not have the same issue.

The work around at the moment is to temporarily disable the host firewall and then once a connection is established I am able to enable the host firewall and everything works as expected

Any advice on resolving this?