Did svchost.exe behaviour change in Windows 10 Creators Update (Build 1703)?

Yes, this is a change in the Creators Update if you use a PC with more than 3.5GB of RAM. Here all services run in their own svchost.exe to better see which service causes issue or prevent crash of other services if a service crashes a svchost.exe.

If your PC has 3.5+ GB of memory, you may notice an increased number of processes in Task Manager. While this change may look concerning at first glance, many will be excited to find out the motivation behind this change. As the number of preinstalled services grew, they began to get grouped into processes known as service hosts (svchost.exe’s) with Windows 2000. Note that the recommended RAM for PC’s for this release was 256 MB, while the minimum RAM was 64MB. Because of the dramatic increase in available memory over the years, the memory-saving advantage of service hosts has diminished. Accordingly, ungrouping services on memory-rich (3.5+ GB of RAM) PCs running Windows now offers us the opportunity to do the following:

• Increase reliability: When one service in a service host fails, all services in the service host fail. In other words, the service host
  process is terminated resulting in termination of all running
  services within that process.

• Increase transparency: Task Manager will now give you a better view into what is going on behind the scenes. You can now see how much CPU, Memory, Disk & Network individual services are consuming.

  

• Increase security: Process isolation and individual permission sets for services will increase security.

So, don't worry, this is a good change in v1703 and everything is fine.

But there is a way to revert it. This was discovered by an user of a website that deals with Windows tweaking.

So, run regedit.exe, go to HKEY_LOCAL_MACHINE\SYSTEM\CurrentControlSet\Control and create a 32Bit DWORD SvcHostSplitThresholdInKB and set it to a large number (larger compared to your install RAM).