[quotemstr]

If I own a computer, I should be able to run whatever damn software I want on it, including software that provides a network proxy to others. (N.B. a smart TV is a computer I own.)

Yes, yes, we should fight deceptive software that doesn't disclose it has a proxy function. Fine. But there's no way to square 1) fighting all residential proxies, including ones run with informed consent and 2) preserving the public's access to general-purpose compute at home.

I'd rather live with the proxies than for someone to tell me that if I run squid, I'm damaging national security.

[ButlerianJihad]

Very well: your ISPs, telecomm providers, and cloud services also own computers, and they should be able to run whatever they want on the devices they own, and they choose to block all your traffic, block all traffic destined for your premises, and flag your hardware IDs in certain databases, which is software they choose to run because they own the servers.

[quotemstr]

How do their servers know I'm running a proxy, exactly?