Fusion 13 isn't broken. It does run on M1/M2 Macs. But are you trying to run a VM that you created on an Intel Mac and moved to your new M1 MacBook?
The reason I ask is that the error message is telling you that it can't run a VM that requires an Intel chip on an M1/M2 Mac. On M1/M2 Macs, Fusion 13 will not run any VMs created on Intel Macs or VMware Workstation. That's a by-product of Apple deciding to move away from Intel chips and onto their own ARM architecture processors. Any virtual machines that run on M1/M2 Macs must use operating systems that run on the ARM CPU architecture (such as Windows 11 ARM and aarch64/arm64 variants of Linux), not Intel/AMD.
And before you ask, Rosetta 2 does not help you run those VMs on M1 Macs even though it will let you run other applications compiled on Intel Macs to run on M1 Macs. That's also a byproduct of what Apple has built Rosetta 2 to do.
You might want to take a look at the Unofficial Fusion 13 for Apple Silicon Companion Guide https://communities.vmware.com/t5/VMware-Fusion-Documents/The-Unofficial-Fusion-13-for-Apple-Silicon... for guidance, tips, and techniques when running virtual machines on M1/M2 Macs.
No. I haven't created a VM yet. I'm starting the player so I can installed a guest OS. The OS I want to install is Ubuntu-22.04 desktop for ARM.
Does it work differently than VMWare player on Windows or Linux? With VMWare player I start player and then create a VM by installing a guest OS.
If I click on the wrench icon I get this
I haven't created a VM with a guest OS. Why is it showing Ubuntu-22.04?
If you see a virtual machine's console window when you start Fusion and you get its settings when. you ckick on the "wrench", that's means that there is a virtual machine already present on your Mac that Fusion knows about. Is it possible that you migrated your user account from an Intel Mac? If you did, you may be seeing Fusion pick up the old VMs and their Fusion settings.
What do you see if you open the Virtual Machine Library? (from the Fusion menu, click Window > Virtual Machine Library)
There was an intel based vm left over from when I had inadvertently downloaded the wrong Ubuntu desktop image (amd64). (Ubuntu desktop images for ARM have to come from their Nightly Build site.) Once I remove that I could create a new VM using the Ubuntu ARM desktop image.
It should have showed me which VMs were available instead of just giving me that black screen with the play icon. That's just bad UX.
After creating a VM with the Ubuntu desktop for ARM image I realized that it was unusable. The software I need isn't available for Ubuntu running on ARM. Ubuntu will be a non-starter on Mac M1 until software is available for it.