dnsmasq has not been replaced. Since Pi-hole V4, it no longer runs as a separate process - the code is embedded in pihole-FTL. All existing dnsmasq configuration files will still work.
That doesn't seem to be the way it should be. If DHCP is disabled on the modem, and DHCP is enabled on the Pi-hole, the only DHCP server on your network should be Pi-hole and no other device should be providing IPs or DNS assignments.