I struggled with this long enough and took some notes about a workaround
here: https://thealarmclocksixam.com/2017/08/08/dns-configuration-with-

I hope that this can help someone else as well.

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Packages, which is subscribed to network-manager in Ubuntu.

  The default behaviour for search domains changed from 16.10 to 17.04

Status in network-manager package in Ubuntu:

Bug description:
  Since Ubuntu 17.04 uses systemd-resolved for DNS lookups the default
  behaviour for search domains changed. By default systemd-resolved does
  not use the domain supplied by DHCP as a search domain.

  So network-manager should at least have an option to tell systemd-
  networkd to change it's behaviour. In systemd-networkd the
  corresponding option is named "UseDomains".

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