@forumate
There is a punch of nice tools to investigate network issues.
Your Ubuntu machine might have dig on board, a tool to resolve host names.
So you can run e.g.
dig @1.1.1.1 google.com
This tries to resolve 'google.com' using the DNS server 1.1.1.1, which is Cloudflare.
Ensure that you have allowed any on pfSense on the LAN interface, where the VM is connected to.
Here you can find a list of DNS Root Servers, which are used by the Resolver.
You can also try one of these, however, they only resolve the TLD. But you get an idea if you can reach them.
You can also run this command in pfSense.
If your ISP really blocks DNS requests to any other servers, you will have no other option than use the ISP's DNS.
You can also switch the Resolver into the forwarding mode to use the DNS servers given by DHCP or which you stated on the General settings page.