GitHub user fnavidan added a comment to the discussion: VM instances get VR's 
IP as DNS server but cannot resolve through VR

Upon further investigation inside the VR, I found that the dnsmasq service does 
not listen on port 53 which is causing both DNS service not to function and 
cloud-init inside VMs to fail get VM's password from VR. 

By further looking into /etc/dnsmasq.conf file inside the VR, I have figured 
out that problem is caused by two lines below:

#interface=eth0 # Disables binding dnsmasq to the guest NIC
port=0  # Disables listening on port 53

Uncommenting first line and commenting the second one followed by restarting 
dnsmasq temporarily fixed the issue, making the VR a DNS resolver and 
accessible by cloud-init as a data source for passwords.

I confirm that the network offering that the guest network is built with, has 
all services including DHCP and DNS are enabled and mapped to VirtualRouter. 

So,  I'm not sure why CloudStack is writing these two lines in dnsmasq config 
file while DNS is enabled for the network offering. Also I have tried upgrading 
the VR version to v4.18.1 (latest version for 4.18.x) but still get the same 
result.

Any idea would be appreciated. 

GitHub link: 
https://github.com/apache/cloudstack/discussions/11749#discussioncomment-14593902

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