DNS rewrite of CNAME record does not follow upstream chain

I have a CNAME record on my domain set up as follows:
bob.domain.com --> alice.domain.com --> 123.123.123.123

I've setup Adguard to rewrite all DNS queries to alice.domain.com to 127.0.0.1, hence I expect bob.domain.com to resolve to 127.0.0.1 as well. However, bob.domain.com still resolves to 123.123.123.123

Is this intended behavior? I would expect bob.domain.com to resolve to 127.0.0.1 since it points to alice.domain.com, which has a DNS rewrite in place to 127.0.0.1

Thank you.

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Running Adguard Home Version: v0.106.3 in Docker (tag: latest).