Has anyone found a working workaround yet? I use dnsmasq for .local dev routing and held off updating after seeing this but curious if there is a viable path forward short of waiting for Apple to patch it.

Wouldn’t the workaround just be to have your local dns server enable recursive lookups, and point all your DNS queries to it?

What I'd suggest is using lvh.me, which always resolves to localhost, as do all it's subdomains. If you need a specific IP you can use nip.io.

If you want valid certs you can generate them with mkcert and add them to your system trust store.

holding off update seems like reasonable step till the patch comes. I also run a .local for apple containers though not docker.