pihole-FTL (NOT sure there is a problem - requesting clarification)

Does pihole respect IP -> domain configurations stored in the HOSTS file loaded as adlist or does it only take the domains and applies the configured blocking?
This hostfile looks like this

89.27.131.204 r1.sn-4g5e6nsd.googlevideo.com
89.27.131.204 r1.sn-4g5e6nzl.googlevideo.com
89.27.131.204 r1.sn-4g5ednly.googlevideo.com
89.27.131.204 r1.sn-4g5edns6.googlevideo.com
89.27.131.204 r1.sn-4g5ednsr.googlevideo.com
89.27.131.204 r1.sn-8xgn5uxa-cxge.googlevideo.com
89.27.131.204 r1.sn-8xgn5uxa-cxgl.googlevideo.com
89.27.131.204 r1.sn-8xgn5uxa-quhs.googlevideo.com
89.27.131.204 r1.sn-qxo7sney.googlevideo.com
89.27.131.204 r1.sn-qxoedn7z.googlevideo.com
89.27.131.204 r2.sn-4g5e6nls.googlevideo.com
89.27.131.204 r2.sn-4g5e6ns6.googlevideo.com
89.27.131.204 r2.sn-4g5edne6.googlevideo.com
89.27.131.204 r2.sn-4g5edns6.googlevideo.com

and as far as I have understood this it is not intended to block those domains but to redirect them.