DNS Clarification
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In 2.2.5 under DNS Servers, the Dashboard would show 127.0.0.1 ahead of the ISP DNS Servers if the DNS Resolver was enabled and "Allow DNS server list to be overridden by DHCP/PPP on WAN" was checked and "Do not use the DNS Forwarder as a DNS server for the firewall" was unchecked. In the 2.3 series, 127.0.0.1 does not show up with these same settings. Is this intentional and does pfSense still use 127.0.0.1 for itself in these scenarios? My intention is that the ISP DNS servers never be used for anything unless something is wrong the DNS Resolver.
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127.0.0.1 shows up under the DNS servers on the dashboard of my 2.3 box… my settings are set just as yours are.
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I'm seeing the same thing on at least one 2.3 box here that has the DNS Resolver enabled. It works fine with the DNS Forwarder on though. I opened https://redmine.pfsense.org/issues/5775 to track it.