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Revisiting this issue as follow-up on #1510 ...
The built-in policy PrivateDNSZone_DINE.json uses a parameter for groupId, it is not hardcoded in the policy.
The issue is that the custom initiative specifies "cluster" for the parameter value, when the acceptable values are "gateway" and "headnode".
The initiative would also need two policyDefinitionReferenceIds, i.e. "DINE-Private-DNS-Azure-HDInsightHeadnode" and "DINE-Private-DNS-Azure-HDInsightGateway" or similar.
It is noticeable, however, that during my tests assigning the built-in policy with the correct groupId values, the zone is correctly associated with both gateway and headnode PEs, but no records are populated in them.