Hi guys, just some loud thinking about that Incus port 53 problem - it can help you eventually.
Generally speaking Incus is a fork of LXD (system container and virtual machine manager) and the Dnsmasq is the DNS forwarder and DHCP server part, that’s allowing Incus to provide DHCP and DNS services for the VMs.
When looking in the documentation detials Incus node is enabled from the truenas storage driver to create a storage pool with remote TrueNAS storage server … etc. but this is completely different story, unrelated to the Dnsmasq.
Creating a network bridge for the LXC containers and moving the host IP onto it should resolve the issue, as LarsR wrote …
PS: Just found that issue resolved with a bridge in “Error Setting Up Instances - [EFAULT] The DNS and DHCP service exited prematurely: exit status 2”