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All of them will be opened in a separate window. If you cannot find this option even in Windows 11, you must update the Notepad app. For that, open the Microsoft Store and search for notepad.
Notepad will now open the hosts file in edit mode. Go ahead and make changes to the existing entries (if there are any) or add new ones as per your requirements.
Simply navigate to [HKEY_CURRENT_USER\Software\Microsoft\Notepad] and set fWindowsOnlyEOL to 1. After that, non-Windows text files will continue to be displayed in garbled form.