dns=default or if the dns parameter is not set:

NetworkManager orders the DNS servers from different connections based on the ipv4.dns-priority and ipv6.dns-priority parameter in each connection.

If you set no value or you set ipv4.dns-priority and ipv6.dns-priority to 0, NetworkManager uses the global default value. See Default values of DNS priority parameters.

dns=dnsmasq or dns=systemd-resolved:

When you use one of these settings, NetworkManager sets either 127.0.0.1 for dnsmasq or 127.0.0.53 as nameserver entry in the /etc/resolv.conf file.

Both the dnsmasq and systemd-resolved services forward queries for the search domain set in a NetworkManager connection to the DNS server specified in that connection, and forwardes queries to other domains to the connection with the default route. When multiple connections have the same search domain set, dnsmasq and systemd-resolved forward queries for this domain to the DNS server set in the connection with the lowest priority value.