Hi, thank you very much, but it seems to me that Parallels is off topic...
I don't use Parallels.
I installed the W11 Pro ARM virtual machine on VMware Fusion 13.0.2 with macOS Ventura and everything worked perfectly.
And worked even after switching to macOS Sonoma.
I have now upgraded VMware Fusion to version 13.5.0 and have encountered the re-encrypt issues I described.