Safari skips explicit proxy when MDM setting "allow bypassing proxy to access captive networks" is set in global http proxy

We are a DLP endpoint product and we have an web proxy implementation which is installed as part of our product on the Mac endpoints, this proxy requires explicit proxy settings. We have seen that the captive network assistant does not launch the mini-browser(discover the captive network) when an explicit proxy is installed.

Looking at the options we found that there is a Global HTTP Proxy MDM setting available which has an option to "allow bypassing proxy to access captive networks". We tried this setting and we see that for Safari the proxy is bypassed completely even after we connect to the captive network. This is not the case for other browsers like Chrome, Edge. We believe this is an issue/bug with Safari.

We have many enterprise customers who have users who do need to connect to captive networks during travel from time to time and we need to provide a solution for them.