A Proxy Can Send 407 Again After Receiving Credentials
Use another challenged 407 when proxy credentials are absent, incomplete or rejected, and reserve access-denial responses for a different policy result.
Receiving Proxy-Authorization does not mean a proxy accepted the account. When the credentials are missing, invalid or incomplete, another 407 Proxy Authentication Required can be the appropriate response.
The response must contain a Proxy-Authenticate challenge. A Basic example is:
HTTP/1.1 407 Proxy Authentication Required
Proxy-Authenticate: Basic realm="Office proxy"
Content-Length: 0
The client can then obtain another credential or continue the selected scheme's exchange. Some authentication mechanisms take multiple rounds, so a second 407 is not by itself proof that the password was mistyped.
RFC 9110 also distinguishes a valid but insufficient credential: the server ought to use 403 for a request it refuses to fulfill under that identity. A proxy implementation should make that access decision deliberately rather than choosing a new status merely because an authorization header appeared.
On the client side, repeated identical failures need a stopping point. Preserve the response status and challenge in diagnostics, and stop blindly resending the same rejected credential.