This kind of misses the point. The config contents can be stored in uci, in the dhcp file. At config apply, when dnsmasq initialises, uci loads that info and then writes it out to a custom config file, which is loaded at dnsmasq run-time. Everything is done on the fly.
Doing it your way is possible, but then that file needs adding to /etc/sysupgrade.conf so it gets carried across upgrades.
Anyway, I included it in https://github.com/openwrt/openwrt/pull/14975
So you can replace your dnsmasq.init file.
The option dnsmasq instance option is e.g.
config dnsmasq 'rekt'
...
option extraconf 'log-async=20\n\n'