I also went through some of the source code. That "adds things to hosts file" code has some rather questionable entries in it.
m.hotmail.com
watson.microsoft.com
Assorted *.msn.com domains
apps.skype.com
msftncsi.com
"Add spying domains to hosts file" is dishonest, at best. This appears to be a determined effort to break random services for the user which happen to be run by Microsoft. Hotmail, Skype and the NCSI detection are particularly inexcusable things to block under the guise of "destroy spying".