This drops the No proxy server specified. Use -proxy=<ip> or -proxy=<ip:port> error when a empty -proxy= command line argument, bitcoin.conf value, or settings.json value is specified, and just makes bitcoin connect and listen normally in these cases.
The error was originally added in #20003 to prevent a bare -proxy command line argument with no assignment from clearing proxy settings. But it was implemented in an overbroad way breaking empty -proxy= assignments as well.
The motivation for this change is to prevent a GUI bug that happens with #15936, reported in #15936#pullrequestreview-937685759 by vasild, that happens after a proxy setting is enabled and disabled in the GUI. But this change also makes sense on its own to remove a potentially confusing error message.