Yes I am both surprised and disappointed that this fundamental feature is missed out on ER7212PC, which is supposed to be a business-grade product. 

I wonder what take the team so long to push in this change to it. 

It is doing DNS Proxy - it issues its own IP address as the DNS server for DHCP clients so it is accepting DNS requests and passing them on to the upstream DNS servers. 

However there is no config and no support for DNS over HTTPS or DNS over TLS - so you can't do secured Cloudflare Zero Trust DNS filtering through it currently.  Would be great to see this feature added at some point - just the same as it is for the standalone ER routers.

I'm not very impressed with the ER7212PC after deploying it at a site I manage.  Not only is the configurable DNS Proxy feature missing, but when I left it set to issue its own address as the DNS server for DHCP clients (set DNS server to Auto under the DHCP settings for a LAN), I found it frequently stops responding to DNS queries altogether so users experience being disconnected from the internet.  Setting it to issue external DNS servers via DHCP does not seem to be a problem.  It looks like the DNS functionality on this device is not up to scratch.