Unless you're using DNS over HTTPS they can see the unencrypted DNS traffic. There's also Encrypted Client Hello, but they can also see which IP you're connecting to.

Also if the domain responds on the bare IP or there's nothing else they've seen on that IP it's a fair assumption. This is without even wondering if their router sends telemetry

Telemetry isn't a concept that would apply to a router. The information that your router sends, they send to an ISP controlled router, they receive this information for operational purposes, so they don't need to install some client-device application to further collect data.