Where is the Connector installed on your network? It sounds like the DNS settings for it don’t allow it to access whatever is managing those local host entries, if that’s the pihole or your router or something else.
I’d suggest checking wherever the Connector is setup first, if you can remote in to it (if it’s a VM for example) and try running some nslookup commands against those local hostnames, see if it can even resolve them. If not then there’s a DNS configuration issue on that system that needs to be resolved.