Straight forward question, there is no Wayland output option in display output configuration in parole so how to get it working on wayland either by having Wayland output or simulating X.
I just tried installing Parole on my own KDE Plasma+Wayland system and it just works, aside from opening an external playback window, which feels a bit weird, but I'm assuming it's normal. The only display drivers available are X, but the "Automatic" pick works.
If it doesn't work for you, make sure xwayland is installed.