Have dnsmasq resolve multiple domains form local hostnames

I am running dnsmasq 2.90 inside a Debian 11.0 based docker container as part of Pi-hole 5.18.2. I would like to configure dnsmasq to serve the addresses of my local hostsnames for multiple local domains (both .local and .subdomain.mydomain.com) as a local application has the .local domain hard coded. I can only make it work for one domain at a time. This container is providing DNS and DHCP services for my local networks. As part of the Pi-hole set-up addn-hosts=/etc/pihole/local.list is added to the .conf file mounted at /etc/dnsmasq.d. This list contains a list of ~30 IP addresses from local and locally accessible subnets and and hostnames, such as: 192.168.1.10 server01 192.168.2.20 server02 100.115.x.x server03 dnsmasq is serving the local search domain over DHCP both as specified in domain=subdomain.mydomain.com and dhcp-option=option:domain-search.subdomain.mydomain.com in separate config files mounted at /etc/dnsmasq.d, as well as set as a local domain with local=/subdomain.mydomain.com/. This search domain, as well as the IP of the DNS server, is accepted and implemented as expected by my clients:

❯ cat /etc/resolv.conf
…
search subdomain.mydomain.com
nameserver 192.168.2.2

A nslookup of a hostname in the addn-hosts works as expected, adding the search suffix and returning the correct result:

❯ nslookup
> server01
Server:		192.168.2.2
Address:	192.168.2.2#53

Name:	server01.subdomain.mydomain.com
Address: 192.168.1.10

I would like to return the same IP for server01.local:

> server01.local
Server:		192.168.2.2
Address:	192.168.2.2#53

** server can't find server01.local: NXDOMAIN

I have tried adding local to the .config files as local=/subdomain.mydomain.com/local/ both with and without domain=/subdomain.mydomain.com/local/ and separate domain=subdomain.mydomain.com domain=local entries. This either does not change the behaviour, or (if I add the two domain= entries) the nslookup then works for .local and not for .subdomain.mydomain.com. How can I have dnsmasq respond with the hostname IP for both .local and .subdomain.mydomain.com domains?