Pi-Hole is just a DNS-based adblocker. It returns 127.0.0.1 (I believe) for ad-serving domains, so it happens before https even starts to be negotiated.
For hosts files, 0.0.0.0 is generally preferred, which marks the host as unreachable, rather than localhost (127.0.0.1, etc.), which might well recieve and try to process the request.
I'm using the defaults, but from the sounds of the documentation having it return 0.0.0.0 might be beneficial. It certainly explains some weirdness that I've seen when using Pi-Hole.
https://docs.pi-hole.net/ftldns/blockingmode/
For hosts files, 0.0.0.0 is generally preferred, which marks the host as unreachable, rather than localhost (127.0.0.1, etc.), which might well recieve and try to process the request.
https://serverfault.com/a/300410