Microsoft does not have a great record when it comes to data collection. Starting with the release of Windows 10, when they insisted that they needed to collect essentially every possible kind of metadata from users in the name of maintaining the platform, only to later admit that at least half of that data collection wasn't necessary after all, Microsoft's built-in telemetry has been a pain point for privacy-conscious users for years.
Windows 10's telemetry system was a major contributor to the slow uptake of Windows 10, and Microsoft's later decision to add the same telemetry, retroactively, to Windows 8 and 7 as well was even harder to defend; neither older OS, after all, needed to be maintained in perpetuity the way Windows 10 did, and both were mature OSes and much more stable to begin with, so why did they need to harvest users' metadata? I'd still like to know; Microsoft never explained.
Naturally, Windows users generally, and Windows 7 users in particular, started looking for workarounds for Redmond's telemetry bullshit. Third party applications like Spybot's Anti-Beacon, or O&O ShutUp10, began to proliferate, turning off telemetry for users that cared enough to take steps to do so; meanwhile, Microsoft continued to ignore calls by data privacy advocates and activists to turn off the telemetry, or at least to allow all of their users to opt out.
Since the end of July, Windows 10 users began reporting that Windows Defender had started detecting modified HOSTS files as a 'SettingsModifier:Win32/HostsFileHijack' threat.
When detected, if a user clicks on the 'See details' option, they will simply be shown that they are affected by a 'Settings Modifier' threat and has 'potentially unwanted behavior,' [...] it seems that Microsoft had recently updated their Microsoft Defender definitions to detect when their servers were added to the HOSTS file.
Users who utilize HOSTS files to block Windows 10 telemetry suddenly caused them to see the HOSTS file hijack detection.
I can attest to this not being restricted to Windows 10, or to Windows Defender; Microsft Security Essentials running on Windows 7 started exhibiting this same behaviour on my own system last Wednesday. Apparently, having already paid for the privilege of using Windows 7 or 8 is not enough; we're now expected to pay again, by allowing Microsoft to harvest our metadata, even though the operating systems themselves are either out-of-service, or approaching end-of-service.
So, what's a Windows 7 or 8 user to do? Well... personally, I switched to Linux.
Specifically, I switched to Pop!_OS, which seemed well-aligned with my game-centric use case. And while it's been a bit of a learning curve, I have to say that the experience of switching to Pop!_OS in 2020 was far less painful than my attempt to switch to Ubuntu in 2019. I won't say that it's been flawless, but it's been nearly flawless, and I won't be switching back.
Good job, Microsoft! You've finally manage to make using your products
so unattractive that even a procrastinator like me has finally pulled
the rip cord, and bailed on you. Sayonara, and good riddance!
If you're still on an older version of Windows, and wondering what to do next, I cannot recommend strongly enough that you make the shift to Linux. Don't accept an OS that acts like malware, or a giant corporate overlord who never listens to your concerns, and who does not care if you stay or go. Installing your new OS takes only minutes -- a far cry from my last Windows 7 install, which took hours, and even then needed me to install ethernet and graphics card drivers separately, along with hours' worth of updates, and OMG why didn't I do this years ago?
Time saved during OS installation leaves lots of time to acclimatize yourself to the new OS environment... which will still leave you lots of time to actually get back to using your PC. Seriously, I don't have a single regret, and I don't think you will, either. Give it a shot; you've got nothing to lose, except Microsoft's baggage.