Ah - yes - sorry. You're right. And I've already run into roadblocks with it, since DirectX 11 is also not Parallels compatible.
Either way though--I don't think it's in question that Windows/x86 still needs to exist. I think what's in question is how many people that use it actually NEED it. Many of those people don't need Windows any more than they need macOS and could probably get by with an iPad. The customers Apple goes after with a machine like the M2 MacBook Air are the people who still work more comfortably on a laptop, but don't want to break the bank and either prefer the Mac already or want to switch away from Windows and need a cheap entry point. These are valuable users to the Microsoft ecosystem because they're the ones that keep buying PCs and then replacing them every 3 to 4 years when the OS becomes unusable or the hardware stops keeping up with the updates. They're even more valuable to Apple. Once they get reeled in on the MacBook Air, it opens the doors for more hardware sales.
I don't believe for a second though that Windows is any kind of on-par with macOS anymore. I'm leaving the "but it has bugs" discussion aside for now, as every version of every piece of software ever made has bugs, especially desktop OS software. What I'm actually referring to is the fact that the entire Apple ecosystem of hardware and software is built from either full blown macOS or little chunks of it that are needed for that specific device. Each piece is interoperable at least to some degree by each other piece. You benefit the most from having all the pieces at your disposal, but there is enough feature overlap where it's definitely not necessary.
Furthermore, I do have a Windows device in my house--my son's gaming PC. It's been on Windows 10 and 11 now and after using both, I still maintain that the last good version of Windows was 7. It was stable, sleek, and clean and didn't need reformatting nearly as often as some other versions of Windows I've used. I do use my son's computer here and there for access to Windows-only Steam games. The general Windows experience, for better or worse, has not changed. It's not pleasing to look at, not easy to use, and not reliable or stable. And there are still snippets of 30 year old UI in there as well.