I’ve found by having both Adguard and SWAG on the same host that SWAG does not see DNS responses. DNS requests are logged by Adguard but SWAG reports a bad address. Routing to external IP addresses work as expected. Off loading Adguard to another host resolves the issue. Sorry my troubleshooting of docker and containers is rudimentary, so I cannot give any help on the root cause.
we do not support or recommend dns in a container due to the numerous issues it can cause for non-network-savvy personnel. With that said, another option is to bypass your host from using adguard or bypass your containers from using it.