Starting at the end of July, Microsoft has begun detecting HOSTS files that block Windows 10 telemetry servers as a ‘Severe’ security risk. Windows 10 users began reporting that Windows Defender had started detecting modified modified HOSTs files as a. ‘SettingsModifier:Win32/HostsFileHijack’ threat. Microsoft has reached out to Microsoft with questions regarding this new detection. BleepingComputer first learned about this issue from BornCity, and it was strange to see so many people suddenly reporting the detection.
Source: https://www.bleepingcomputer.com/news/microsoft/windows-10-hosts-file-blocking-telemetry-is-now-flagged-as-a-risk/