After some extensive testing, I found that the variable "$domain_name" should be replaced to "$dns_domain" in /etc/puppet/modules/cobbler/templates/dnsmasq.template.erb (there are 2 occurences).
After some extensive testing, I found that the variable "$domain_name" should be replaced to "$dns_domain" in /etc/puppet/ modules/ cobbler/ templates/ dnsmasq. template. erb (there are 2 occurences).