Resolution
To delete/uninstall virtual machine (VM):
1. Launch Parallels Desktop or Parallels Workstation and open the appropriate virtual machine.
2. Choose File menu in the Parallels top menu bar -> Delete (or Remove, depending on Parallels Desktop version).
Parallels Desktop for Mac Parallels Desktop for Windows
3. Follow the on-screen instructions. It is recommended to leave the default values intact.
Note: The operation is irreversible. The Virtual Machine will be deleted, and there will be no way to restore it.