Guess it's an issue with Mojave? Have been using Parallels on my 2018 (intel) Mini since 2020 with Windows 10, MacOS Mountain Lion and Sierra. Never saw these problems....
Well, I can confirm that it doesn't work in VMs of either Mojave 10.4.4 or 10.4.6 in either Parallels 18 or Parallels 20 (wither either's VM opened in either, since they're compatable). Will explore other MacOSes shortly.
Was running Catalina initially as the host operating system on the Mini,
My condolences.
upgraded to Monterey later and still runing it now. Am always concerned about things breaking in Parallels, so even though I have the pro subscription, am reluctant to upgrade. Still running 18.1.1. now. Planning to upgrade to Sequoia before long and worried about what that might break.
Well, I don't think P18 is going to run in Sequoia (let alone run fast under that bloated sow, since nothing else will either).
Monterey is, AFAIA, the last fully-clone/bootable (via CCC 6.1.1) version of the MacOS, and I'll eventually be squeezed out sometime later in the decade. But I'm fine with that, seeing as I'll never buy a Mac with a soldered-in drive.
Disconnect the USB drive. When you reconnect it, Parallels should ask if you want to connect the drive to the Mac or the virtual machine.
It does so ask (after rooting through settings to flip the appropriate switches that one would think ought to have been default in the first place for any VM that's not a "guest" running on a slave device or monitor). But it still doesn't work (at least not with Mojavel see above).
Internal drives can be accessed using Parallels Shared Folders, but I don't think that's good enough for Migration Assistant.
What if you try to mount the internal drive by using File Sharing on the host machine? In the guest machine, connect to the host and select the internal drive. I don't know if Migration Assistant will look at mounted network drives...
It will, provided they're mounted as drives, not folders (which is what Parallels does).
...You could use Disk Utility to create a GPT formatted disk image and restore a partition to the disk image. Then convert that to a Parallels Virtual Hard Disk.
After considerable effin' around, I discovered that a Mojave VM's Migration Assistant would indeed import from an externally-hosted Disk Utility-made image into which I'd cloned a Mojave partition. I also discover that, instead of using the Migration Assistant, I could use the VM's Disk Utility to create a new volume (in the VM's APFS container), it would pop up on the VM's desktop, then I could run CCC5 to clone the mounted external image to the new volume. (Then I restarted with Option held down...and that failed miserably, BUT I could still select a different Startup Disk, and that worked!)