When should I NOT to use proxy mode?

General Product Information > Transparent Bridge Mode
Many service providers deliver their service using a modem or bridged connection.  This is true for many wireless and DSL providers specifically.
If your onsite ISP provided device is not a router, i.e. does not actually route traffic between it and the gateway, then you have a bridged connection.
If this is the case, you should NOT use proxy mode.  Proxy mode requires the ability to reset ARP information on both the WAN and LAN side of the Edge appliance.  This is not possible when the onsite device is a modem or bridging device.

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