Winget on fresh Windows 11 for Arm 64 install does not work and cannot be updated through the release .msix

Start by reproducing winget source update and the Add-AppxPackage command on the reported Windows 11 Arm64 environment. Review diagnostic output under %LOCALAPPDATA%\Packages\Microsoft.DesktopAppInstaller_8wekyb3d8bbwe\LocalState\DiagOutputDir; done means source updates and the release .msixbundle installation either succeed or return a clear actionable error.

Brief description of your issue

I am unable to update sources, install packages, or even install the most recent winget release .msixbundle on a fresh install of Windows 11 Pro Arm 64 running on a VM on an M1 Mac under Parallels. This seems to be closely related to (or a duplicate of) a number of other issues, but I thought I would open this because of the Arm 64 issue, and because I have logs to attach.

Steps to reproduce

winget source update
Add-AppxPackage https://github.com/microsoft/winget-cli/releases/latest/download/Microsoft.DesktopAppInstaller_8wekyb3d8bbwe.msixbundle

Expected behavior

For either the initial winget command to succeed or fail with an error message, and for the installation of the .msixbundle to succeed.

Actual behavior

winget source update fails weirdly, with no output but a stopped spinner and the following PS prompt coloured blue, the same as the spinner.

Add-AppxPackage ... fails with an error about resources being in use:

Add-AppxPackage : Deployment failed with HRESULT: 0x80073D02, The package could not be installed because resources it
modifies are currently in use.
error 0x80073D02: Unable to install because the following apps need to be closed
Microsoft.DesktopAppInstaller_1.17.10691.0_arm64__8wekyb3d8bbwe.

Environment

PS C:\Users\...> winget --info
Windows Package Manager v1.2.10691
Copyright (c) Microsoft Corporation. All rights reserved.

Windows: Windows.Desktop v10.0.22631.2792
Package: Microsoft.DesktopAppInstaller v1.17.10691.0

Logs: %LOCALAPPDATA%\Packages\Microsoft.DesktopAppInstaller_8wekyb3d8bbwe\LocalState\DiagOutputDir

Links                                                                                                                   ---------------------------------------------------------------------------                                             Privacy Statement   https://aka.ms/winget-privacy                                                                       License Agreement   https://aka.ms/winget-license                                                                       Third Party Notices https://aka.ms/winget-3rdPartyNotice                                                                Homepage            https://aka.ms/winget                                                                               Windows Store Terms https://www.microsoft.com/en-us/storedocs/terms-of-sale