Single dot domain/DNS root zone query issue with containerized wireguard

I got it fixed by binding the DNS listening port to the pihole node local address in the docker-compose file of Pi-hole,
in my case - "192.168.50.11:53:53/udp" instead of - "53:53/udp".

I am not sure why this solution worked. Solution was linked by someone on reddit. I have also added this in my reddit post liked above.
Related links:

Note that a user in docker-wireguard github issue is blaming pihole docker for this.