I want to setup custom DNS for Azure SQL Managed Instance and according to the documentation I need to put Azure Recursive Resolver DNS IP address 168.63.129.16 at the end of the virtual network DNS list.
Would adding 168.63.129.16 to DNS list affect name resolution in the virtual network?
Azure SQL Managed Instance uses DNS to resolve the IP of the Azure management service that controls the instance and where the health information are sent. If you want to put your own custom DNS, Managed Instance requires this rule as a fallback option in the case that custom DNS servers are not responding and there is a risk that the Managed Instance cannot access Azure managements services in order to keep running properly.
Note - this is just one way of achieving our requirement that custom DNS server has to provide public DNS name resolution. In case of having custom DNS server on-premises this is even not possible.
Adding 168.63.129.16 to DNS list will affect name resolution in your VNet only if all of your DNS servers are down. DNS resolution falls back down the list only if DNS server upper in the list is not responding. If the response is that the name could not be resolved that answer is simply accepted without propagating request further.
