Cause 1: Trying to set bypass without a custom proxy enabled
This is the most common trigger. You're in Windows' proxy settings (Settings > Network & Internet > Proxy), and you try to add an address to the "Bypass proxy server for local addresses" box or the exception list. But you haven't switched "Use a proxy server" to On and set a custom proxy address first. Windows doesn't let you touch the bypass list unless the proxy is in "Custom" mode—that's the flag it's complaining about.
I know this error is infuriating because you just want to add an exception, not turn on a full proxy. Here's the fix:
- Open Settings > Network & Internet > Proxy.
- Under "Manual proxy setup," toggle Use a proxy server to On.
- Enter any valid proxy address (like
127.0.0.1and port8080)—even a dummy one works for this step. - Now the bypass fields become editable. Add your addresses to the Exceptions box.
- If you don't actually need a proxy, turn Use a proxy server back Off after saving. The bypass list stays.
This tripped me up the first time too. The UI doesn't tell you why it's greyed out—it just gives you that cryptic error code.
Cause 2: Corrupted proxy settings in the registry
Sometimes the registry keys that control proxy settings get stuck in a weird state—especially after a VPN disconnect, a Windows update, or malware cleanup. The error persists even after you toggle the proxy on/off. You'll see the error again when any app (like a browser or PowerShell script) tries to change the bypass flag programmatically.
Here's how to nuke the corruption:
- Press Win + R, type
regedit, hit Enter. - Navigate to:
HKEY_CURRENT_USER\Software\Microsoft\Windows\CurrentVersion\Internet Settings - Delete these values (right-click each > Delete):
ProxyServerProxyEnableProxyOverride
- Close Regedit and restart your PC.
After reboot, Windows recreates these keys with defaults. You'll have no proxy set—but no error either. Re-configure your proxy normally from Settings and you're good.
Cause 3: Group Policy overrides your local settings
If you're on a work or school PC, or you've previously run a corporate setup script, a Group Policy Object (GPO) might be locking proxy settings. The error code 0XC00D10C3 can appear when a script or admin tool tries to modify the bypass flag locally, but policy overrides it.
Check if policy is active:
- Press Win + R, type
rsop.msc, hit Enter. This shows applied policies. - Navigate to: User Configuration > Administrative Templates > Windows Components > Internet Explorer.
- Look for Make proxy settings per-machine or Disable changing proxy settings. If either is enabled, that's your culprit.
If you're on a personal machine and don't want policy interference, clear it:
- Open Command Prompt as Administrator.
- Run:
reg add "HKCU\Software\Policies\Microsoft\Internet Explorer\Control Panel" /v Proxy /t REG_DWORD /d 0 /f - Reboot.
On a managed device, you'll need IT to update the GPO—don't fight it yourself.
Quick-Reference Summary Table
| Cause | Fix | Takes (minutes) |
|---|---|---|
| Bypass set without custom proxy | Toggle proxy On, add dummy proxy, set bypass, toggle Off | 2 |
| Corrupted registry keys | Delete ProxyServer, ProxyEnable, ProxyOverride in Regedit |
5 |
| Group Policy interference | Run reg command to clear policy, or contact IT | 5-30 depending on admin access |