I agree that there are downsides to this approach. NVIDIA OpenShell does the same thing: https://docs.nvidia.com/openshell/latest/sandboxes/manage-pr.... I had wondered how they deal with the fact that client programs sometimes come with their own CA bundles. Turns out OpenShell sets various common environment variables (like REQUESTS_CA_BUNDLE used by Python's requests) to try to convince as many clients as possible that the proxy's certificate is to be trusted :) I would assume exe.dev does something similar.
(I was interested in this because I was actually working on something similar recently: https://github.com/imbue-ai/latchkey. To avoid the certificates issue, this library uses a gateway approach instead of a proxy, i.e. clients call endpoints like "http(s)://gateway.url:port/gateway/https://api.github.com/..." which can be effectively hidden behind the "latchkey curl" invocation.)
