You might be looking for https://en.wikipedia.org/wiki/Wireless_distribution_system
This is a standard way to form bridges in WiFi networks and does not require any ARP proxying. In practise this requires certain OS/driver/firmware/chipset combinations to work though.
Buried in-thread, both macOS 26.6 and 27 beta have fixed the issue — has anyone studied whether they implemented this or resumed the old proxy arp method?