This should be fixed with the upcoming upload:

systemd (234-1ubuntu2) artful; urgency=medium

  * Set UseDomains to true, by default, on Ubuntu.
    On Ubuntu, fallback DNS servers are disabled, therefore we do not leak 
queries
    to a preset 3rd party by default. In resolved, dnssec is also disabled by
    default, as too much of the internet is broken and using Ubuntu users to 
debug
    the internet is not very productive - most of the time the end-user cannot 
fix
    or know how to notify the site owners about the dnssec mistakes. 
Inherintally
    the DHCP acquired DNS servers are therefore trusted, and are free to spoof
    records. Not trusting DNS search domains, in such scenario, provides limited
    security or privacy benefits. From user point of view, this also appears to 
be
    a regression from previous Ubuntu releases which do trust DHCP acquired 
search
    domains by default.
    Therefore we are enabling UseDomains by default on Ubuntu.
    Users may override this setting in the .network files by specifying
    [DHCP|IPv6AcceptRA] UseDomains=no|route options.
  * resolved: create private stub resolve file for integration with resolvconf.
    The stub-resolve.conf file points at resolved stub resolver, but also lists 
the
    available search domains. This is required to correctly resolve domains 
without
    using resolve nss module.
  * Enable systemd-resolved by default
  * Create /etc/resolv.conf at postinst, pointing at the stub resolver.
    The stub resolver file is dynamically managed by systemd-resolved. It 
points at
    the stub resolver as the nameserver, however it also dynamically updates the
    search stanza, thus non-nss dns tools work correctly with unqualified names 
and
    correctly use the DHCP acquired search domains.
  * libnss-resolve: do not disable and stop systemd-resolved
    resolved is always used by default on ubuntu via stub resolver, therefore it
    should continue to operate without libnss-resolve module installed.

 -- Dimitri John Ledkov <x...@ubuntu.com>  Fri, 21 Jul 2017 17:07:17
+0100

** Changed in: systemd (Ubuntu)
       Status: New => Fix Committed

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https://bugs.launchpad.net/bugs/1703882

Title:
  systemd-networkd does not pick up dns-search from DHCP

Status in systemd package in Ubuntu:
  Fix Committed

Bug description:
  When using networkd as renderer for netplan the nameserver gets set
  via DHCP but the search list is not picked up. This did work with
  ifupdown:

  ubuntu@bar-zesty6401:~$ cat /etc/network/interfaces
  ...
  # The primary network interface
  auto eth0
  iface eth0 inet dhcp

  ubuntu@bar-zesty6401:~$ cat /etc/resolv.conf
  ...
  nameserver 192.168.2.1
  nameserver 127.0.0.53
  search smbhome.net

  
  ubuntu@bar-artful6401:~$ cat /etc/netplan/01-netcfg.yaml
  # This file describes the network interfaces available on your system
  # For more information, see netplan(5).
  network:
    version: 2
    renderer: networkd
    ethernets:
      eth0:
        dhcp4: yes

  ubuntu@bar-artful6401:~$ networkctl status eth0
  ● 2: eth0
         Link File: /lib/systemd/network/99-default.link
      Network File: /run/systemd/network/10-netplan-eth0.network
              Type: ether
             State: routable (configured)
              Path: xen-vif-0
            Driver: vif
        HW Address: 00:16:3e:71:31:57 (Xensource, Inc.)
           Address: 192.168.2.159
                    fe80::216:3eff:fe71:3157
           Gateway: 192.168.2.1 (PC Engines GmbH)
               DNS: 192.168.2.1

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