Fusion supports the following Mac server and client versions for the guest operating system:
Do you have an Intel Mac or an M1/M2 Mac?
I’m guessing the latter…
You didn't state what Mac you're using.
If you're using an M1 or M2 based Mac, you cannot virtualize macOS in Fusion. Virtualizing macOS on Apple silicon (M1/M2) can only be done using Apple's high-level virtualization framework which Fusion doesn't use. (It uses the lower-level hypervisor framework.)
If you want to create a macOS VM on Apple silicon, you can try VirtualBuddy, UTM, or Parallels. However, the VM will be severely limited in what it can do. (I.e., no snapshots, no split disks, etc.)
It appears to me that you are running an Apple Silicon (M1/M2) Mac.
If you are, please note that macOS is supported as a virtual machine on Intel Macs only. No version of macOS can be virtualized with Fusion on an M1/M2 Mac.
If you need to virtualize macOS 12 or 13 on Apple Silicon Mac, either use the paid Parallels or the free VirtualBuddy https://github.com/insidegui/VirtualBuddy - there is a link to download a pre-built version of VirtualBuddy so you don't have to build it. Both have comparable feature sets for virtualizing macOS.
and thanks to @palter - I forgot about the latest UTM enhancements which will allow you to virtualize macOS on Apple Silicon.
M1. I am kicking myself as I though version 13 supported this ability. There's goes $99 down the 'virtual tubes'! Thanks all.
If apple enables it with the lower level hypervisor, i expect we'll see it in fusion. The higher level version is really really limited.
What I wonder though, is if apple is telegraphing the future - moving MacOS to a type1 hypervisor that runs a VM for each user on it.
That would be a very inefficient use of resources to run each user as a VM.
I could see running a user environment as a container. But then again, Apple hasn't (to my knowledge) made an announcement of a container framework for macOS. And Docker isn't really a first class citizen on macOS yet.
