Why are you using /etc/hosts to modify the behavior of the Apple resolver system? That’s not how macOS directory services work, and Apple only appears to offers

Why are you using /etc/hosts to modify the behavior of the Apple resolver system? That’s not how macOS directory services work, and Apple only appears to offers it as a legacy backwards-compat stub with no guarantee of support or effectiveness for modern anything. It’s no surprise that it’s not an effective solution for you.