iCloud for Windows setup error (Either there is no default mail client or the current mail client cannot fulfill the messaging request)

Whenever I try installing iCloud for Windows I get the errors below:

1. Either there is no default mail client or the current mail client cannot fulfill the messaging request. Please run Microsoft Outlook and set it as the default mail client.
2. Setup can't continue because Outlook isn't configured to have a default profile. Check your Outlook settings and try again.

My setup:

• Mac Studio M1 Max running Parallels 18.0 with Windows 11 Home
• Microsoft Office 365
• iCloud for Windows from the Microsoft site

I'm able to get iCloud Drive to work in Windows, however, whenever I check the option for "Contacts and Calendars," the above errors pops up. I've ensured Outlook is set as default mail client with a default profile, and have tried several other solutions to no avail including running Office repair.

My guess is that issue has something to do with running Windows via Parallels (and/or the M1 platform) as I've NEVER run into this issue running Windows via Bootcamp on Intel machines.