UK light-heavyweight Joshua Buatsi made a winning yet unimpressive debut to his career under fresh promotional backing with a unanimous decision over Parker in the Manchester arena.
The Olympic medal winner's punch output appeared to earn him a split decision in a close ten-round bout at the boxing arena.
But Parker landed significant shots, connecting with powerful single shots in a match where the approaches never quite clicked, with excessive holding spoiling the fight.
Two judges scored it 96-94 to the winner, with the remaining official a even score.
"It wasn't my greatest display but how do champions respond? They win," the victor said in the ring as he was met by negative reactions from the spectators.
The Londoner got back to winning after his initial pro loss - an epic battle with his previous opponent in last winter - to earn a twentieth professional win.
Various analysts believed Parker, thirty-one, deserved the victory but the Derbyshire fighter suffered the second defeat of his 28-fight career.
The Champion Earns Win in Slow Match
His career development has plateaued in recent years through promotional disputes and long spells of inactivity.
Previously predicted as the future of UK boxing, he now is positioned trying to fulfil that early promise - possibly in what seems like a ultimate opportunity - under fresh management.
He began cautiously, with both competitors ready to overcommit in a tentative early stages.
The challenger, whose only previous defeat came at super middleweight against his former opponent in 2022 after suffering a hand injury mid-fight, was making just his second appearance at the higher weight class.
By the fight's midpoint, the underdog had made it competitive, creating difficulties for the favorite, who worked behind a solid defense to barely take the better rounds.
The spectators' acceptance wore thin during constant clinching, with the challenger slipping to the canvas several times during close exchanges.
The underdog ended stronger, but multiple periods were challenging to assess. However, previous titleholder the boxing analyst - commentating on the broadcast network - had it particularly wide for Parker, scoring for Buatsi just a single round.
The victor moves on, but with the caliber of power puncher Benavidez, and Russian champion Dmitry Bivol ruling the division, the journey to titles - judging by this showing - still looks steep.
Ricky Hatton Tribute Motivates All-Manchester Fight
In the supporting bout, Arthur beat Rea by close verdict in a outstanding all-Manchester battle to secure the continental belt.
The stadium fell silent for a deeply poignant tribute prior to the bout as a bell ceremony sounded in remembrance of the city's native Ricky Hatton, who died at age 46 in recently.
It was the first major televised fight night in the location since Hatton's passing. As the final chime faded, the silence transitioned to a shout of "only one Hatton".
The action inside the ropes equaled the emotion. The eventual winner was sent to the canvas by a significant blow squarely on the jaw in the initial stage, getting up unsteadily to his feet on the referee's count.
But the Manchester United-red equipment of Arthur soon advanced again. From the other corner, the opponent - in opposing blue - was marked up soon, heavy swelling appearing under his face as the pair traded hard punches.
The challenger, 27, connected with strong blows but the champion, thirty-four, fought fire with fire with stinging uppercuts as the pace seldom decreased over twelve rounds.
The victor barely secured the decision with scoring tallies of 114-114, narrow lead and clearer margin, but the two athletes were determined and brave, all the qualities their idol the legend embodied.
