Does Hyper-V not support nested virtualization? Or maybe macOS doesn't support it. Because M2 chips absolutely have FEAT_NV2 so nested virt should work well; only ARM system around with it. One more win for Asahi Linux, I guess.
At the moment the missing component is nested virtualization support in the macOS Virtualization Framework. Once added there would probably need to be some minor changes in Parallels to take use of it as well.