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Thank you for this detailed feature request. I can confirm that your understanding of the current limitation is accurate based on AWS documentation.
Currently, AWS VPC DHCP Option Sets use DHCP Option 15 for domain names, which according to RFC 2132 section 3.17 only supports a single domain name. While it was previously possible in Amazon Linux 2 to pass multiple domain names in the domain-name parameter to create-dhcp-options (resulting in space-separated entries in /etc/resolv.conf), this was an accidental feature rather than intended behavior.
As you've correctly identified, this approach causes issues with systems like Amazon Linux 2023 and modern Ubuntu/Debian distributions that use systemd-networkd for network configuration. These systems follow the RFC specification strictly, and since the space character is invalid in domain names, it gets encoded as \032, resulting in malformed search domains like foo.example.com\032bar.example.com instead of two separate domains.
AWS documentation explicitly acknowledges this limitation, stating: "Some Linux operating systems accept multiple domain names separated by spaces. However, Windows and other Linux operating systems treat the value as a single domain, which results in unexpected behavior. If your DHCP option set is associated with a VPC that has instances running operating systems that treat the value as a single domain, specify only one domain name."
The documentation also notes that to properly support multiple domain names, a DHCP server should use DHCP Option 119 (as defined in RFC 3397, section 2), which is the exact solution you're requesting.
For submitting this feature request to the AWS service team, I recommend using the AWS feedback mechanisms through your AWS account team or the AWS Support Center, as they can track and prioritize feature requests directly with the VPC service team.
Sources
Functionality deprecated in AL2 and removed in AL2023 - Amazon Linux 2023
Functionality deprecated in AL2 and removed in AL2023 - Amazon Linux 2
CreateDhcpOptions - Amazon Elastic Compute Cloud
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