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Disclaimer: Community trackers are created by Red Hat Product Security team on a best effort basis. Package maintainers are required to ascertain if the flaw indeed affects their package, before starting the update process.
I believe this is a false positive as the CVE is reported against dnsmasq and dnsmasq is not shipped as part of the Incus package in Fedora. Although incus depends on dnsmasq the referenced vulnerability happened to be in a much older version of dnsmasq as currently shipped with Fedora.