.NET Framework 3.5 - Windows 11 - M1 Mac Ventura 13.2.1

Dear Greg,
Thank you for your feedback.
To let us better understand the situation, please perform the following steps:
1. Reproduce the issue.
2. Collect a technical report (click Parallels icon || > Help > Send technical data > check "Attach screenshots..." > press Send Report) and send the report's 9-digit ID in a reply to this message.

On our side, we did make a test of a new windows 11 virtual machine creation and enabled the .NET 3.5 successfully on the same setup as yours using Parallels Desktop 18 latest version 18.2.0.
Kindly find the steps below:
a. Create new Virtual Machine (click Parallels icon > Control Center)
b. In the upper right corner, click on the "+" button
c. In the window that appears, click "Continue".
d. In the window that appears, click "Get Windows 11 from Microsoft" > "Install Windows".
e. Wait until the virtual machine is installed.
f. Click on the windows start icon > type "Control Panel" and press enter > select Uninstall a program > Choose "Turn Windows features on or off" in the left panel.
g. Check the ".Net framework 3.5" box and press ok > choose the option to let windows download the required files and wait until it installs.

Please let us know the results.
Thanks!