The new color management options in 22.x versions break the proxy color and dynamic range, when using LOG or HLG/PQ original clips that have been over-ridden to Rec.709 with an input LUT.
The original clip on the Rec.709 sequence is 'normalized' correctly. But when you then go to create proxies, the CM is not used in creating the proxy.
What you get is a blown out useless mess of an image as your "proxy".
Not a correctly viewable image in the same color space as the original clip and the sequence.
We need the proxies to follow the clip Color Management.