See
https://bugzilla.redhat.com/show_bug.cgi?id=805942
which describes the problem (all dnsmasq/qemu-kvm/etc processes started by libvirtd are killed by libvirtd restart) and
https://www.redhat.com/archives/libvir-list/2012-March/msg00946.html
which has an earlier fix to part of the problem, and the discussion that led to the above bug being filed.