AVMs FRITZ!Boxes, which are quite popular in Germany, have been doing the same thing for decades. They use fritz.box as their domain, which was probably pretty safe to use when tlds where limited to countries.
Fritz!Boxes use their DNS server, they do not man in the middle port 53. Or at least mine does.
Yeah, I had various Fritz!Boxes over the years and if you use another DNS server on a machine, the fritz.box name just fails to resolve.
Netgear business wifi access points do the same, if you’re using their DNS then there’s an easy config host.
It would be good to know which models are affected. I have a TP Link WiFi relay and TP Link ethernet switches, but a FreshTomato router and could not exercise the issue.