As a single reference point, my Pi-hole is happily running on a NanoPi Neo with 256M of RAM with ~800k strong blocklists, along with Wireguard (granted mine is a 4 core CPU, so my web UI will be snappier). Others in our team are running Zeros without issues.
Please have a read of V6 - Post release fixes and findings for potential mitigations.
Your debug log shows that your router is indeed distributing two IPv4 addresses for DNS.
Note that switching DNS servers then would happen at your client's discretion.
They'll likely have noticed that one of them was down during upgrades, making them prefer the other one. It would be entirely up to the clients if and when they would decide to switch over to the v6 one. As long as they are happy with your v5, they may never consider to do so.
During upgrade, Pi-hole updates database schemas to the most recent version. While this database conversion may take up both time and resources, it happens only once, during upgrading.
Also, as RAM was identified as a potential bottleneck during updates, we've released an immediate mitigation by having the temporary database created as a file. If you did start your v6 upgrade before that was released, then you may indeed have observed RA;M shortages.
I'm fairly confident that you manage to fix your slow UI behaviour after reading the linked info, and then you should be back to normal. 