No, you need to specify the AllowedIPs on the node which is making the requests, not the node which receives the requets. So you send only the IP ranges you want through the VPN tunnel and every other IP range through your default interface.
So for example I have 3 nodes: 10.6.0.1 to 10.6.0.3.
Node 0.1 is the device which runs my pihole instance. So I want nodes 0.2 and 0.3 only send the DNS requests to it (make a split tunnel).
So on the nodes 0.2 and 0.3 I set DNS to 10.6.0.1 and in their configs I set AllowedIPs to 10.6.0.0/24 (and also to my LAN IP range so I can access my LAN from the outside if I want).