Here is a screenshot from a working Windows DNS server. Not for local use, and not advised, but can be. (Ldap compatible) Even with the DNS of your inrenet supplier if you may register a host. There are other recods in place.
And I can remove the domain first site record and still go to the internet. (big problem for my local users cause they canot logon, just local. But the internet-gateway is stil reachable). Ofcourse there is always the DNS of your intenet supplier. No problem. Bin there done that. And no problem with arbitrary domains.
And the only forwarding server i use at the moment is the Pi-hole. Works like a charm, normaly Dyndns free for more than 15 years now and DNSExit Both for Mx records and multiple websites (hostheaders are so easy on windows)
Just as Pi-Hole is the other way around Just for internet (blocking ads). The blocklist are just textfiles, so google avoid using those for ads.
BTW still no youtube ad blocks. Look at the boys of ublock origin, also freeware.