When you connect to a friend, Parsec defaults with an echo cancellation "On". This is an experimental feature that will hopefully alleviate the echo that many users experienced in the past when playing games with friends. There is one negative impact, however. When you do have it on, and you're talking, some of the audio from the game you're playing may sound quieter. We're working on improving this.
Please note: This setting cannot be changed mid stream, and can only be turned on/off before connecting to your friend.
If you're still hearing an echo when your friend connects to the PC, it may be as simple as changing the audio input device in Discord on the client PC. Parsec only cancels the sound on the default audio input. Please make sure Discord is using the default audio input.
If you're using another version of the application or the CLI, you can change this setting with the advanced setting server_audio_cancel = 0 for off or server_audio_cancel = 1 for on.
If this doesn't work :(, you'll have to use the manual fix with VB Audio Cable.