i don’t know exactly how it happens but somrtimes for example browser uses its own DNS and it leaks this way. mullvad adds a virtual network interface and forces all traffic through it and prevents leaks this way

yes and no, ideally vpn also handles DNS querries but sometimes with faulty implementations DNS can leak. mullvad has a test in their website but only works for mullvad vpn.

https://browserleaks.com/dns

i was using this site for testing, does the job