A bit of this has been covered here before, I'll reiterate the steps since it's now 2022 and this thread was the first on Google for me.
You'll need to do a few things to get this to work properly on kali-22.3:
1. Install dependencies
2. Reboot
3. Mount the tools ISO as executable
4. Install the tools from the ISO
Here's my full guide in Markdown, follow it and you should be straight. Don't try to install the Tools without the reboot. GL!
Code:
## steps needed to get full functionallity out of parallels on a m1 machine
## fresh 2022.3 kali install from arm64 iso
*vm menu, choose actions > install paralell tools*
>this inserts a virt CDrom
sudo mount -o exec /dev/sr0 /media/cdrom
>mount the CD as executable
cd /media/cdrom && sudo ./install
>attempt install, observe the error
>you'll probably need to install some packages - next
sudo apt update
sudo apt upgrade
sudo apt auto-remove
>update/upgrade everything and clean up
sudo apt install dkms
sudo apt install libelf-dev
sudo reboot
>install needed dependencies, reboot
*vm menu, choose actions > install paralell tools*
>this inserts virt CDrom again
sudo mount -o exec /dev/sr0 /media/cdrom
>mount the CD as executable
cd /media/cdrom && sudo ./install
>attempt install, should be no error