[chef] fqdn and hostname

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On an Ubuntu box, let's say the hostname is machine1.example.com.

In /etc/hosts, the first line is

1.2.3.4   machine1   machine1.example.com

What will chef consider the fqdn and hostname?    Apparently just "machine1".

Now that I have discovered this strange quirk, I wonder if I should use this 
on
purpose, to make the machine names smaller.     Or, be careful to avoid this
loophole.    I am just thinking out loud.    Do people generally use the whole
fqdn...