This bug was initially created as a copy of Bug #1766944

I am copying this bug because: 

it also applies to RHEL8.x

Description of problem:

When configuring the network interface using DHCP and not having any static hostname, NetworkManager sets the hostname from Option 12 (Hostname) and falls back to reverse-DNS query.
However, the reverse-DNS query is not made if there is no default route (typical scenario: isolated network):

src/nm-policy.c:
-------- 8< ---------------- 8< ---------------- 8< ---------------- 8< --------
 696 static void
 697 update_system_hostname (NMPolicy *self, const char *msg)
 698 {
  :
 744         /* Hostname precedence order:
 745          *
 746          * 1) a configured hostname (from settings)
 747          * 2) automatic hostname from the default device's config (DHCP, VPN, etc)
 748          * 3) the last hostname set outside NM
 749          * 4) reverse-DNS of the best device's IPv4 address
 750          *
 751          */
  :
 818         priv->dhcp_hostname = FALSE;
 819 
 820         if (!priv->default_ac4 && !priv->default_ac6) {
 821                 /* No best device; fall back to the last hostname set externally
 822                  * to NM or if there wasn't one, 'localhost.localdomain'
 823                  */
 824                 _set_hostname (self, priv->orig_hostname, "no default device");
 825                 return;
 826         }
  :
-------- 8< ---------------- 8< ---------------- 8< ---------------- 8< --------

In the code excerpt above, on line 820, a test is made whether there is some default route, which isn't the case.
This leads to setting hostname to "localhost.localdomain".

When a default route is set, then the code on line 827 and later is used instead, which ends up having a reverse lookup.


Version-Release number of selected component (if applicable):

NetworkManager-1.20.0-3.el8


How reproducible:

Always


Steps to Reproduce:

1. Install a KVM with 2 networks, 1 (eth1) being isolated

# cat > /etc/sysconfig/network-scripts/ifcfg-eth1 << EOF
TYPE="Ethernet"
BOOTPROTO="static"
DEFROUTE="no"
IPV6INIT="no"
NAME="eth1"
DEVICE="eth1"
ONBOOT="yes"
IPADDR=10.0.0.1
PREFIX=24
EOF

2. Set up a DHCP server on eth1 using dnsmasq that doesn't reply to Option 12 (Hostname) nor Option 3 (Routers) and a static lease for a client

# yum -y install dnsmasq
# cat > /etc/dnsmasq.d/dhcp.conf << EOF
domain=example.com
dhcp-range=10.0.0.100,10.0.0.250,72h
dhcp-host=52:54:00:03:f8:3b,10.0.0.100,FOO7,30d
dhcp-option=3
dhcp-option=12
EOF
# systemctl restart dnsmasq

3. Reconfigure a client VM (MAC 52:54:00:03:f8:3b above) to use the isolated network and remove static hostname

# rm /etc/hostname
# dracut -f

4. Reboot


Actual results:

FQDN Hostname set to "localhost.localdomain"


Expected results:

FQDN Hostname set to "FOO7.example.com"


Additional info:

If "dhcp-option=3" (Routers) is removed from dnsmasq, the client VM gets "FOO7" hostname.

IMHO, the current order of precedence is a bug:
1) a configured hostname (from settings)
2) automatic hostname from the default device's config (DHCP, VPN, etc)
3) the last hostname set outside NM
4) reverse-DNS of the best device's IPv4 address

It should be:
1) a configured hostname (from settings)
2) automatic hostname from the default device's config (DHCP, VPN, etc)
3) reverse-DNS of the best device's IPv4 address
4) the last hostname set outside NM

Or order kept as is but "3) the last hostname set outside NM" be a fallthrough if there was no "last hostname set outside NM", i.e. "localhost".