What is the ruling on dealing with a brother who accidentally killed a Muslim and is now in prison, repentant, knowing that the parents are asking for reconciliation with him?

You did well in advising your brother to stay away from bad company and return to obedience to Allah. Maintaining kinship ties is obligatory, and it is not permissible to sever them, especially if your brother has repented and sought forgiveness. Do not abandon your brother because of a sin he has repented from. Abandonment is permissible only for a disobedient person who persists in sin, if advice does not benefit him, and with consideration for the greater good. Your connection with your brother is also considered a form of filial piety towards your parents, and you should be a helper for him in maintaining righteousness.