DNS fail: Pods append local domain to DNS queries


I have installed a k3s cluster and then rancher to manage it.
Been trying to establish a minecraft server just for testing, but pods keep restarting.
When i enter the pods shell and try to ping for example google.com it looks like this:

PING google.com.local.btveien.net ( 56(84) bytes of data.

If I create the deployment, choose Networking and set DNS Policy to None and set a nameserver, the resolution works just fine.

I also noticed that alpine and busybox keeps looping in “CrashLoopBackOff” if I create then via the Rancher UI.
If i run kubectl run -it busybox --image=busybox from CLI then the pod is created and dns resolution works.

I’m not an expert on rancher or kubernetes, just trying to set it up so I can learn.
But, i can’t figure this out.