L7 doesn’t match.
regexp=“\x04local\x05net|\x0288\x03168\x03192\x07in-addr\x04arpa”
should be:
/ip firewall layer7-protocol
add name=local.net regexp="\\x05local\\x03net|\\x0288\\x03168\\x03192\\x07in-addr\\x04arpa"
(note the \x05 before local and \x03 before net)
You could also skip everyhing after \x03net, I just use it to suppress forwarding local reverse name lookups.
/ip firewall layer7-protocol
add name=local.net regexp="\\x05local\\x03net"
Source: http://forum.mikrotik.com/t/redirect-dns-lookup-of-local-domain-to-a-single-dns-server/80611/1