This is saying that Caddy wasn’t able to make DNS queries to check that your domain’s TXT records were updated; it seems like however your DNS resolvers are configured on your system cause it to break in some way.
Setting this turns off those propagation checks, i.e. Caddy no longer double-checks “did I successfully write the TXT records?” and just moves on in telling the ACME issuer “yep it should be good, go ahead” and it succeeds. Propagation checks are optional (not necessary, just a “sanity check”) so it’s fine to disable it.
I recommend when you upgrade to v2.8.0 that you turn off propagation checks and keep an eye on your logs, I think we may have fixed some of the issues which may resolve the problem for you but I’m not certain. It would be great if you could follow up on that later!