ZTE and IPV6 causing Pihole not block ads

Indeed, your debug log shows that your router is advertising its own IPv6 LLA as DNS server:

   * Received 80 bytes from fe80::1 @ eth0
     (…)
     Recursive DNS server 1/1: fe80::1
     DNS server lifetime:900 sec

This will allow your IPv6-capable clients to by-pass Pi-hole, just as chrislph has mentioned.

You'd have to find a way to configure your router to stop advertising its own IPv6 as DNS server (or, if that's not possible, to advertise your Pi-hole host machine's IPv6).

Depending on your router's model and firmware, you may be able to do so by switching off your ZTE's DHCPv6 Server, as well as setting the M and O flags to Off for your RA Service, as another user has successfully done on their ZTE H6645P.

If that isn't available in your ZTE model, you'd have to consult your router's documentation sources on further details for its IPv6 configuration options.