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Issue
I created a hosts file entry and added the FQDN to Domain Management > External Domains & IPs, but web browser is not fetching the destination per hosts file.
Reason
When you configure a domain name to bypass, AnyConnect-RSM monitors DNS requests in order to find the IP's. If you have a hosts file entry, no DNS request will occur because the client uses hosts file before DNS query.
Resolution
Destination to domains with hosts file entries need to be bypassed by SWG proxy by adding destination IP address to Domain Management > External Domains & IPs.