Having the same issue, too.
It isn't just Safari. The problem seems to affect almost every application that uses OS X's built-in networking libraries. Most such applications don't even download the proxy.pac file: they just completely ignore the Automatic Proxy Configuration settings (though everything works fine with hard-coded proxies). Some apps, like Safari and iTunes do actually appear to download the proxy.pac file and then ignore it.
My proxy setup worked flawlessly on Mavericks and before and continues to work correctly with apps that don't use Apple's networking code, like Chrome and Firefox, also when they are using the system proxy settings (not Firefox's own proxy settings).