In this scenario I am using two proxy servers:
- User proxy - with authentication required for users
- System proxy - for machine context without any authentication
Sample squid configuration is below together with PowerShell script to configure prerequisities (https://docs.microsoft.com/cs-cz/azure/active-directory/hybrid/how-to-connect-install-prerequisites#connectivity).
Do not make any changes to miiserver.exe.config. This file is overwritten on every upgrade so even if it works during initial install, the system stops working on first upgrade. For that reason, the recommendation is to update machine.config instead.