Why doesn't my airport express router issue proper DNS server address to DHCP clients?

I have an Airport express router (version 7.6.4). It was configured to connect to internet via a cable modem, acting as a router with NAT. This means it obtians WAN address from cable modem, and in LAN it assumes IP address 10.0.1.1 as a gateway, and issue IP address to my 4-5 wireless clients (MBA, iPads, PCs) vi DHCP.

However I recently encounter an issue, that the router no longer issues DNS server address obtained from Cable Modem(206.x.x.x) but instead tell every DHCP client to use router ip address (10.0.1.1) as DNS server. I was pretty sure before Dec 2013 it is issueing (206.x.x.x) to all DHCP clients.

Apparently now the Airport express is acting as a DNS server or as a DNS cache. This works sporadically and very often result in long DNS look up or DNS look up failure.

Is this a bug or is it supposed to do so? Any configuration can turn it off so Airport express will issue Cable modem obtained DNS server to DHCP clients?

My network otherwise works fine. for some of the Clients (e.g. one MBA) I configured DNS for it mannually and it's internet is working very smoothly.