VM isn't where Preferences says it is

On my iMac, Preferences -> General -> Virtual machines folder says the Windows VM is in ~/Parallels. That folder exists but it's empty. The VM that actually runs is in Shared/Parallels. It doesn't matter for my machine since Parallels does know how to find it but Preferences on my wife's iMac also says the VM is in ~/Parallels but it's actually in ~/Documents/Parallels. I would like to move hers to Shared so it's not so likely to get damaged by accident. I can just move the Parallels folder but how do I tell Parallels how to find it if it's ignoring the Preferences?
Config for both of us:
Hardware: iMac M1
MacOS: 15.6.1
Parallels: 26.0.1
Windows 11 Home: 24H2