After updating your Ubuntu virtual machine to version 20.04.4 or 21.10 you may encounter the following error message when booting:
The issue has been fixed in the recently released Parallels Desktop 17.1.2 update.
Please download the update here.
And as a general rule, if you encounter an issue with a Linux machine (virtual or physical one) failing to boot after an update, a good temporary workaround is to boot using the previous version that is usually preserved by the system, by performing the following steps:
1. Run Linux.
2. Press Esc during boot.
3. Select "Advanced options for ...".
4. Select an earlier kernel and press Return.