I installed the latest version of the Parallels 13.
"Navigate to Hardware -> CPU & Memory and allocate 2 processors (or just 1 if the total number of available processors is just 2) and 2 GB of memory for Windows [or just 1 GB if total Mac memory is only 2 GB (or) 3 GB if total Mac memory is 8 GB (or) 4 GB if total Mac memory is > 8 GB]. Then, select 'Graphics' and allocate 1 GB of video memory for Windows. Finally."
This worked for me thanks! There are no more vertical distortions when I switch desktops.
After altering the configurations, I shut down the VM and restarted my MacBook Pro 2016.
Now it works like a gem.
UPDATE 16/11/17:
Sorry, it only worked for a few hours, I restarted today and I have the vertical distortions again! And what's more is that Parallels start up time and Windows 10 start up time has increase a lot. It use to be near instant when I was using Sierra with Parallels 12.
Please fix, otherwise it was a waste of money for me to upgrade to 13.
Last edited: Nov 15, 2017