Comment 7 for bug 2012391

We see the same behavior on our clouds (charmed yoga) with neutron+dns integration[1] set up, dhcp_domain in nova is set to the charm default-value of openstack.example.

[felipe_alencastro@alencastro ~]$ openstack network create --dns-domain test.example.org. example-net

[felipe_alencastro@alencastro ~]$ openstack network show example-net -c dns_domain
+------------+-------------------+
| Field | Value |
+------------+-------------------+
| dns_domain | test.example.org. |
+------------+-------------------+

[felipe_alencastro@alencastro ~]$ openstack server create --flavor m1.xsmall --image rocky8 --network example-net --security-group test --key-name test-key rocky8ci

[rocky@rocky8ci ~]$ hostnamectl
   Static hostname: rocky8ci.openstack.example
         Icon name: computer-vm
           Chassis: vm
        Machine ID: 00d5403cf95c4216935ffbcbab997f6d
           Boot ID: 7963f8a0e98c40788e518383a77e0417
    Virtualization: kvm
  Operating System: Rocky Linux 8.8 (Green Obsidian)
       CPE OS Name: cpe:/o:rocky:rocky:8:GA
            Kernel: Linux 4.18.0-477.27.1.el8_8.x86_64
      Architecture: x86-64

[rocky@rocky8ci ~]$ hostname -A <-------------- hostname -A does a PTR query and receives the proper fqdn from designate resolvers.
rocky8ci.test.example.org.

[rocky@rocky8ci ~]$ curl -s http://169.254.169.254/openstack/latest/meta_data.json |jq -r .hostname
rocky8ci.openstack.example.

[1] https://docs.openstack.org/designate/latest/user/neutron-integration.html