K8s CoreDNS & DNSMasq loop

I have a Kubernetes cluster of 4 nodes (running Ubuntu 22.04), 2 control-plane and 2 workers. On every node, dnsmasq is running with the following configuration:

port=53server=8.8.8.8server=1.1.1.1server=8.8.4.4server=/cluster.local/10.96.0.10listen-address=::1,127.0.0.1

I have disabled the systemd-resolv daemon, and dnsmasq is running correctly. My /etc/resolv.conf looks like so:

nameserver 127.0.0.1

When I install Calico CNI on my cluster, and CoreDNS starts up, I get the following error:

.:53[INFO] plugin/reload: Running configuration SHA512 = 591cf328cccc12bc490481273e738df59329c62c0b729d94e8b61db9961c2fa5f046dd37f1cf888b953814040d180f52594972691cd6ff41be96639138a43908CoreDNS-1.11.1linux/amd64, go1.20.7, ae2bbc2[FATAL] plugin/loop: Loop (127.0.0.1:36306 -> :53) detected for zone ".", see https://coredns.io/plugins/loop#troubleshooting. Query: "HINFO 8419997730312109033.1720259693350973698."

How can I resolve this issue? I am aware I can remove "loop" from the config map of CoreDNS, however that does not "feel" like the correct answer, and I'm curious what people suggest to fix this.

Thanks!