Yeah, but NsLookup appends the Suffix prior to submitting the query with no suffix.
The DNS Client itself will not append a suffix to a multi-label name (depending on a registry setting and patch level, see AppendToMultiLabelName registry setting or group policy).
NsLookup on the other hand is a troubleshooting tool, it has its own, more basic, rule-set it will always append unless you terminate the name with a period.
That is, the difference between this:
nslookup demogateway.demodomain.local.
And this:
nslookup demogateway.demodomain.local
If you want to see it do that, run this one for Debug:
nslookup -d demogateway.demodomain.local
Chris