Thank you so much for posting here.
If we need functionality as described in: http://msdn.microsoft.com/EN-US/library/aa384240.aspx then let it enabled. As we mentioned, we could not use a proxy once the WinHttpAutoProxySvc service is disabled.
Frankly speaking, I am not professional with this issue. According to my research, using WPAD is a requirement if you ever want to do a Hybrid Azure AD Join in an environment that uses a proxy server.
For more discussion, we could refer to the below link:
Thank you so much for your understanding and support.
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