Same here. Upgrading from 25992. Problem also applies to previous insider build which is 10.0.25997.1010. As an IT Pro I tried all of the workarounds currently available online. System File Checker (SFC), dism.exe, chkdsk, disabling developer mode, removing some devices (bluetooth, camera etc), re-installing parallel tools etc. Also tried to install from ISO instead of Windows Update. I even tried to re-create EFI Boot partition, uninstalling some heavy apps they may influence so many system components like visual studio 2022 etc. no luck.
I also checked the setup log files (which can be found in C:$WINDOWS.~BT\Sources\Panther\ ) with setupdiag.exe and found 0 matching issue. I think this is something Paralles needs to solve.