Hi
Windows in Paralles on m1 host requires special network driver. While unattended installation it is installed automatically. You need to install it by hands while manual installation. The driver can be found in the root directory of Parallels Tools.iso
I can't say what is the most convenient way to connect Parallels Tools.iso to VM. Likely going to menu of Parallels Desktop -> Action -> Install Parallels Tools will connect the iso. Or you can connect it manually, from /Applications/Parallels Desktop.app/Contents/Resources/Tools