So you guys are saying that they can see that we have rooted and know that we are using the hotspot?
Hard to really tell for certain if they can tell if you're rooted or not (I'm not a VZW employee with that knowlege), but I've read that they can see what software version your device is running, which if true, could be a definite giveaway.
Keep in mind, there's nothing that says you can't root your device (even if the carriers and and manufacturers continue to discourage it) as far as I know...but it does void your warranty. If you need to call customer service and believe you may need to make a warranty claim, probably best to revert back to stock OS
prior to making the call, and certainly if you're taking the phone into the store!
Now, when it comes to "hotspot", keep in mind there are two different distinctions:
The official Mobile Hotspot app that VZW supports -- if you use this, regardless of what ROM you're running, you do need the MH plan on your account. I'm pretty sure there's a warning that pops up when you open the app to alert you to this. When turned on, all data is routed through the hotspot, and VZW definitely knows you're using it, rooted or not.
Wifi Tether apps -- there are a few of them out there, and most (possibly all) require root access to run. These are "under the radar" of Verizon and do not require a separate MH plan, i.e. they are free. In my years on these forums, I've yet to come across a horror story of any user that VZW has brought the hammer down for using (but that doesn't mean it hasn't happened), and assuming that your intended use with the app is pretty light, then I doubt you have anything to worry about. I don't know for sure, but my guess is that *if* VZW wanted to, they could analyze your data usage and determine whether or a tether app had been used -- and if you were to start using large amounts of data, they just may do that. I feel it is important to stress that using these tether apps does violate VZW's Terms of Service.
Keep in mind, I'm not preaching or judging anyone here, nor am I defending or validating VZW's policies, I'm just trying to pass info along and answer questions based on what I've read around here.
If it were me, my general comfort level with this whole thing tells me that if I thought I was only gonna use the tether every once in a while (like on road trips with my wifi tablet or with my laptop when traveling), then I'd probably just root and use one of the free apps. If I thought I'd be using the tether quite regularly, then I'd advise spending the $$ to be safe...but that's just me.