The reason is that DHCP routes are not re-generated during FRR render as long as there is no protocols static entry in the configuration at all.
- https://github.com/vyos/vyos-1x/blob/ec80c75d677608da438a9360657d9729296afc73/python/vyos/frrender.py#L609-L611
- https://github.com/vyos/vyos-1x/blob/ec80c75d677608da438a9360657d9729296afc73/data/templates/frr/staticd.frr.j2#L84-L92
Workaround:
set protocols static route 169.254.0.0/16 blackhole
Add a blackhole route for the APIPA IP prefix which is only used for IPv4 link local addresses.