Unable to resolve hostnames

Expected Behaviour:

Show hostnames instead of local IP addresses in the query log.

Actual Behaviour:

Query log shows IP addresses instead.

Debug Token:

https://tricorder.pi-hole.net/8BKIVHgs/

I have tried conditional forwarding and unchecking the "Never forward reverse lookups for private IP ranges" option under the Advanced DNS settings but it did not help.

Router is Tp-link Deco M5.
Router is the DHCP server.

Relevant dhcpcd.conf settings:

inferface eth0
static ip_address=10.0.11.120/24
static routers=10.0.11.1
static domain_name_servers=127.0.0.1

Screenshot for reference:

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