When the fuck did a mobile hotspot become something you have to pay extra for?
It's my goddamn motherfucking mobile data and MY PHONE. I should be able to use it however I want. My wifi went down because the greedy, cunt-faced shitbags at Comcast stole taxpayer subsidies to enrich themselves instead of actually providing the service we're paying for. I tried to switch to a mobile hotspot and my phone refuses to open one. Everyone responsible for this shit should be fed to alligators locked away in a fucking gulag. We have no rights and live in a corporate plutocracy.
the second point feels highly suspect as most internet traffic is encrypted these days, and all ISPs could analyze is the domain you're talking too, and the amount of traffic to each
The hardware isn't restricted, anymore at least. It's usually restricted at the network level. The hotspot uses a different connection. I've been on plans where I can use hotspot, but it just redirects all traffic to a page telling me it's not on my plan, or like on Visible where hotspot traffic is throttled to 5mbps. This also causes hotspot traffic not to go through a VPN if you tried.
Edit: if you're rooted you can bypass this with VPN Hotspot which lets you pass your hotspot through whatever VPN is active