Parallels M1 Fullscreen Menu Bar still there

Hi everyone,
I posted this question before, my first thread for help here on this forum, and was sadly banned.
The ban has been lifted from support, but my thread seems gone.

My problem is still there and I cant really fix it.

Please check out this picture:
https://monosnap.com/file/xweUXs0ujqTpeb3aqS8x3Ol5N8MW92

When I go into fullscreen modus, the menu bar is still there, but only in this half-state.
When the mouse goes to the top border, the menu pops out, so its not a real full screen experience.

The machine is a Mac Air M1, nothing special installed, just regular parallels.
Everything else is pretty much stock, as after a fresh installation. So I cant figure out whats wrong.

Also, I played around with the settings for display in parallels. No combination of settings works.
My last option is to do a full wipe of the machine, but I fear that it would still persist and just cost me unnecessary effort and time.


I would be happy for any help anyone could give me.
Thank you!