The same problem here. Upgraded from 16.04 to 16.10. When using network manager 
for connecting to cisco VPN (network-manager-openconnect), DNS does not work at 
all. Even public domains are not resolved. 
The only possibility for using VPN for me now is to manually add VPN's internal 
nameserver to /run/systemd/resolve/resolv.conf

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https://bugs.launchpad.net/bugs/1624317

Title:
  systemd-resolved breaks VPN with split-horizon DNS

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