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On Windows PC’s, the Automatic Private IP Address of 169.254.x.x is assigned when a DHCP server cannot be reached. In your case, it may be that the WDS connection is not successful.
As a test, try assigning a static IP address to your PC on the LAN subnet, such as 192.168.1.199, with gateway IP of your main router and see if it can access the LAN and Internet.