I’m not sure what would have caused the initial break, but the reason for the issue was that /etc/resolv.conf on your host is a symlink to somewhere under /etc/resolvconf/…
This path doesn’t exist in the restricted /etc that the snap has access to and so /etc/resolv.conf appeared as a broken symlink inside the container, causing DNS resolution to fail.
I’ve now whitelisted /etc/resolvconf in the LXD snap, which fixes that issue.