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If you set up a VPN endpoint on a Hetzner box, you're trusting Hetzner not to MITM your DNS queries. They're likely more trustworthy than your local ISP (although that leaves you more identifiable to folks running the servers or snooping on server-side traffic, and Cloudflare will hate you). That threat model tradeoff is good for many people.
Given the OP use case, you are going to get a letter from Hetzner at some point.
Not if they are only using it to route the DNS traffic (though in that case a cheaper VPS might be better), which will work if the ISP is only poisoning DNS replies and not (which is often the case) blocking traffic to the target servers entirely.

The problem with this is you are adding a moving part to your DNS lookups. It might be worth adding two on separate VPS hosts and have your resolver fall back to the second if the first goes down.

Another, usually more minor, problem is that some services (like CDNs) use the source of your DNS query to modify the response so you get sent to a topologically near-by end-point. This means you might notice such services being slower as you are sent to a PoP near your VPN host not one closer to your actual location.

Oh well OP was doing shady stuff ... then yeah they should continue with using VPN provider. VPN providers are shady AF, I don't think there is VPN provider I would trust more than my local internet provider.
Well that wouldn’t be running your own vpn. Hetzner is. They’d let you do this? Seedbox is against their tos hard to imagine they’d be a good choice to run a vpn for your linux isos.
> They’d let you do this?

Can't speak for Hetzner, but considering VPN use in Russia and China - I'd imagine most EU\US vps providers have someone's 3x-ui, remnawave or naked v2ray installed.

Plus - how are they going to detect your remnawave node sitting on 443 port? For them it's just some traffict.

And if you are worried about the amount (torrents) - you don't really need to torrent though them. You just need an access to a torrect tracker to get your magnet link and meta info.

Most default configs for 'ray have torrents locks for this very reason - you communicate with other people (seeds\peers) directly.

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