Why does InetSim DNS give 127.0.0.1 and not its interface address?

Question

linux

The DNS service of the INETSIM internet emulator started responding with 127.0.0.1 to any DNS request instead of the ip address of its network card. I can't understand why.
The environment is the following:

• The network adapter has a static address of 192.168.174.137
  
• Network adapter in UP and responding to pings from the network
  

2: ens33: <BROADCAST,MULTICAST,UP,LOWER_UP> mtu 1500 qdisc fq_codel state UP group default qlen 1000
    link/ether 00:0c:29:b5:ee:c9 brd ff:ff:ff:ff:ff:ff
    inet 192.168.174.137/24 brd 192.168.174.255 scope global ens33
       valid_lft forever preferred_lft forever

• Inetsim is running and listening on UDP/53

[email protected]:~# netstat -tulpna
Active Internet connections (servers and established)
Proto Recv-Q Send-Q Local Address           Foreign Address         State       PID/Program name    
tcp        0      0 192.168.174.137:53      0.0.0.0:*               LISTEN      1750/inetsim_dns_53 
udp        0      0 192.168.174.137:53      0.0.0.0:*                           1750/inetsim_dns_53

• Logs show InetSim responses to external DNS queries, but always responds with 127.0.0.1
  
• The Linux host running InetSim is on a host-only network. It does not have any upstream DNS configured