The simplest and most effective answer here is violence, but like most people you would probably hesitate to beat your brother halfway or all the way to death.
I'm not going to repeat all the other advice here, but I will say this: Make sure your conscience is clear with whatever action you do or do not take. If you take option 3 and your psychotic ex-con brother snaps and kills your parents it will be just as much your fault as it was the fault of your parents for enabling him and your brother for actually doing the deed, and you will have to live with that. While you may not want to believe your brother capable of that, anyone who would lay their hands on their parents like that is incredibly unstable and it really doesn't take much for someone like that to completely lose control.
I feel I need to requote this, having first hand experience with 2 bad seed roommates. People like this can have periods where things intensify and/or they feel they need to do something. Its irrational but escalation of violence is one of the thrashings someone like this in a depression will do. This needed to be stressed.
Its normal to go through hard times. The rest of us go through hard times alone, this guy seems like the type to not lie down and accept mediocrity and/or a loser life. This can manifest as violence especially as pressure to leave the house, get a solid job, etc. are mentioned even once. Even 1 time a year is too much for your brother, trust me when you are in this situation you have your own version of things and aren't doing much thinking. Its all emotional and misplaced behavior. My other friend called the cops on our roommates, and even with the cops there, he was still assaulted. This was after he tried to kick his door in. He tried kicking the door in, he dialed quietly, the police couldn't find the fucking address, and he had to run by him and 5-6 of his friends in the living room doing a literal barrel roll to the door to signal the cops. The cops came over, he got hit. They arrested and took him away. Later the other bad seed (who was not arrested in the initial arrest) jumped on him in the kitchen, strangling him in a struggle to the living room couch. I came in through the slider at the right time after getting a voicemail he left me sounding scared in his room from earlier in the night. He barely got out. He had known the 2nd roommate for 18 years, since childhood.
They were mad about our jobs and income. They realized how stupid it was after the legal trauma. That there was no reason for the violence, complete 180, and no apologies necessary. It was lowbrow bullshit.
It WILL get worse before it gets better I'm afraid. There will be a legal trauma. There is no way to avoid this, from my perspective of firsthand experience.
He WILL start blaming everyone around him, even if he doesn't say it out loud. This is the track he is on. Please be careful. He might even end up going up for a life sentence, YOU DON'T KNOW.
He obviously needs medication and/or serious counsel from someone he respects. But it is not your place or position to make suggestions as his brother. Doctors are not someone he respects. Counsel he would listen to can only come from an institution he respects. If bigger cooler bullies (peers) explained what he is doing and why its wrong, he would respect it and may have a life-changing moment. Even if it required being shunned by the bullies he looks up to, or beaten by them, first.
Unfortunately, the brutes need to lose the brute before they can be counseled by so-called "lesser men" ala counselors and doctors in his mind, this only happens with a serious legal trauma. Which he has already failed, the incarceration did not humble him. He is too far gone now. When someone's go-to is violence even post-incarceration, there's not much that can be done aside from ensuring that when that legal trauma happens, everyone makes out OK. Including your fathead family member.
Good luck.