Much appreciate your explanation of vps providers but this threat is about functionality included with NS.
Hostname is a functionality of the os not a hosting company but some of them when you are booting your system attaching their local domain for identification. Then you will get a total mess with your current NS setup regard to your domain and email accounts. Know that from autopsy my friend.
Anyway when you focus on the threat not a Microsoft then you can understand that a lot of users already complain abut this restriction in NS.
I'm new to this community and not sure what your function "ambassador" in the project is but I'm much appreciate all NS developers work like I'm thinking is clearly visible in my post.
The threat is about functionality and that is my comment.
Hope this help with understanding the threat.