@MarcB can only quote from memory since I don’t have the setup at work.
But my fog server is 1.3.0RC16 running on a Raspberry Pi running raspbian [https://forums.fogproject.org/topic/8642/installing-a-bit-of-fog-pi-the-hackish-way]. Yes it is running dnsmasq but I compiled 2.76 to have uefi support [https://forums.fogproject.org/topic/8725/compiling-dnsmasq-2-76-if-you-need-uefi-support].
My ltsp.conf configuration is a bit more complex when you add in the uefi support, but the initial script is also listed in the tutorial https://forums.fogproject.org/topic/8726/advanced-dnsmasq-techniques
As for Virtualbox I installed 5.1.10 for Ubuntu 15.10 (“Wily”) x64 and the VirtualBox 5.1.10 Oracle VM VirtualBox Extension Pack. Then I changed the network adapter to bridged that was connected to my laptop’s wireless adapter and set the virtualbox network adapter to the intel (desktop) adapter. Then for the boot order I set the network adapter first in the list.
Your dnsmasq log file “looks” good. It says its sending bootfile and next server. But that isn’t what your pcap was showing.