Help understanding local DNS

Expected Behaviour:

Adding local dns entry pve.local 192.168.1.200 should make it available to all devices using pihole on my local network.

Actual Behaviour:

I'm unable to access pve.local from any machines using pihole as it's DNS (fallback 1.1.1.1). Pinging from the pihole does work though.

Am I understanding this right? If I add these domains it should resolve for everyone on the network?

Debug Token:

https://tricorder.pi-hole.net/dzl00ba5pm

You should not configure a "fallback" DNS server for the clients:

Ah awesome, I've removed the fallback dns and also change the tld to home and all seems to be working now.