I believe (have read somewhere) that this requires nested virtualization (Android apps in Windows 11 are virtualized); which is not supported (hardware or software?) by Apple on M1/Pro/Max/Ultra. I have no idea whether it is supported on M2.
Have you tried rebooting your device and checking for any updates to the Android app or Parallels Desktop software? If the problem persists, contacting support for the app or software can help resolve the issue. Today's apps have a huge amount of functionality, which sometimes causes crashes. Our company has recently integrated an application from smartengines.com and these guys are over support anytime. Thanks to the cooperation, our company was able to automate many processes.