This doesn't look like a bug in apt. It looks more like apt-setup is creating a bogus proxy entry, as it was noticed upstream. There it was also reassigned to apt-setup.
I can confirm that I was also bitten by this bug during installing Dapper 6.06.1 Server (netboot and CD installation) ** Also affects: apt-setup (Ubuntu) Importance: Untriaged Status: Unconfirmed -- apt cant work with disable proxy https://launchpad.net/bugs/47044 -- ubuntu-bugs mailing list ubuntu-bugs@lists.ubuntu.com https://lists.ubuntu.com/mailman/listinfo/ubuntu-bugs