This is completely unethical, if not downright illegal. It's not the ISP's responsibility to censor or maintain the web; their sole responsibility is to provide access to it.

Ignoring that it's not their responsibility to interfere with traffic, there's no way the method used for finding infringing files is 100% accurate. There will be many lawsuits to come from this function.

Let's ignore that too. Let's just say it's fine for an ISP to redirect your traffic to the most advantageous site for the ISP, and that it's fine for the ISP to give you a different reply than what you asked for. We now have a massive proxy server. They can censor sites that compete with them, they can censor ideas they don't like, they can censor artistic sites because there's a chance that someone might have once posted an icon that looked too much like a Pac-man. This is not the web I want.