Symptoms
For the legacy VPS subscriptions, before the upgrade to 7.0, hostnames with the format of vps-$SUB_ID-$VPS_ID.custom.domain.example.com could be resolved correctly, despite the DNS records existed in provider.com DNS zone (that belonged to brand).
After the upgrade to 7.0, such DNS records stopped getting resolved.
The DNS server is based on PowerDNS.
Cause
The upgrade procedure involved moving the PowerDNS server from 2.x version to 3.x.
PowerDNS (before 3.0) broke strict RFC compatibility by not always checking for the presence of a SOA record first. Since 3.0, RFC compatibility is followed.
Reference: PowerDNS Internals
Resolution
There is no resolution for such custom behavior.
It is advised to use the native functionality of the Virtualization (Virtuozzo containers) module and configure a single default DNS zone to be used for placing VPS hostname A records.