DNS Alternative has nothing in common with /run/connman/resolv.conf. This file is managed by connmand and provides DNS addresses for system.
Localhost address in /etc/resolv.conf is inherently wrong, because in default setup, it redirects all DNS requests to connmand DNS proxy that is running at localhost that uses DNS’es from /var/run/connman/resolv.conf and you are in the dead loop.
DNS Alternative disables connmand DNS proxy and provides its own(dnsmasq+dnsxcrypt-proxy).