What is expected to happen?

You have defined your local domain as lan in Pi-hole.

  # The DNS domain used by your Pi-hole.
  #
  # This DNS domain is purely local. FTL may answer queries from its local cache and
  # configuration but *never* forwards any requests upstream *unless* you have
  # configured a dns.revServer exactly for this domain. In the latter case, all queries
  # for this domain are sent exclusively to this server (including reverse lookups).
  #
  # For DHCP, this has two effects; firstly it causes the DHCP server to return the
  # domain to any hosts which request it, and secondly it sets the domain which it is
  # legal for DHCP-configured hosts to claim. The intention is to constrain hostnames so
  # that an untrusted host on the LAN cannot advertise its name via DHCP as e.g.
  # "google.com" and capture traffic not meant for it. If no domain suffix is specified,
  # then any DHCP hostname with a domain part (ie with a period) will be disallowed and
  # logged. If a domain is specified, then hostnames with a domain part are allowed,
  # provided the domain part matches the suffix. In addition, when a suffix is set then
  # hostnames without a domain part have the suffix added as an optional domain part.
  # For instance, we can set domain=mylab.com and have a machine whose DHCP hostname is
  # "laptop". The IP address for that machine is available both as "laptop" and
  # "laptop.mylab.com".
  #
  # You can disable setting a domain by setting this option to an empty string.
  #
  # Possible values are:
  #     <any valid domain>
domain = "lan"

You also have this parameter set:

  # If set, A and AAAA queries for plain names, without dots or domain parts, are never
  # forwarded to upstream nameservers
  domainNeeded = true ### CHANGED, default = false