Sorry this is 8 months later than you posted - but I've encountered the same issue and was googling to see if others had solved it.
A few months ago I was experimenting with wireguard and set up a private VPN between two houses - all was well and so I modified my DHCP Server configuration to push the static route (to the other house) out via isc-dhcp-server
Seems the problematic part was: tag:known. For some reason dnsmasq doesn't show something different in startup log messages when I remove it but now seems to work. (I cant tell if it works with /22 because I stoped using it.)
Apparently, the mystery appears to be solved!
Window 2016 DHCP server advertises time servers only when it is requested in DHCP Discover message, like this one:
So, only our WAP asked for NTP server information, since PCs get their time updated from AD. I guess this way both systems can coexist without interference and complications.
Thanks for your ...