I logged a ticket with Parallels regarding this issue and see below for their final response:
Our development team is working on fixing the issue with usb devices, since different devices require tests, we need more time to fix this issue.
We recommend that you install Parallels Desktop 17.0.1:
1. Uninstall Parallels Desktop 17.1.4 as described in the article: https://kb.parallels.com/en/124255
2. Download and install Parallels Desktop 17.0.1 : https://download.parallels.com/desktop/v17/17.0.1-51482/ParallelsDesktop-17.0.1-51482.dmg
Note: When running the Parallels Desktop 17.0.1 installer, you will be prompted to update to 17.1.4 (which is the latest one). Please close that window, and then click "No, use current" to proceed with installing version 17.0.1. Once installed, it should activate automatically, using the license associated with your Parallels account.
As soon as the issue is fixed, we will get back to you.
At least they have acknowledged the issue and that they are working on a solution. Seems like we will have to wait for them to fix this issue.
Our development team is working on fixing the issue with usb devices, since different devices require tests, we need more time to fix this issue.
We recommend that you install Parallels Desktop 17.0.1:
1. Uninstall Parallels Desktop 17.1.4 as described in the article: https://kb.parallels.com/en/124255
2. Download and install Parallels Desktop 17.0.1 : https://download.parallels.com/desktop/v17/17.0.1-51482/ParallelsDesktop-17.0.1-51482.dmg
Note: When running the Parallels Desktop 17.0.1 installer, you will be prompted to update to 17.1.4 (which is the latest one). Please close that window, and then click "No, use current" to proceed with installing version 17.0.1. Once installed, it should activate automatically, using the license associated with your Parallels account.
As soon as the issue is fixed, we will get back to you.
At least they have acknowledged the issue and that they are working on a solution. Seems like we will have to wait for them to fix this issue.