Proxy means that the engine takes all the content from your network locations and caches it on your local playout machine. There is no sense in using proxy for video files stored on the local disk. You can specify how much cache is needed - 500GB, 1TB, etc. The files are split up and migrated to local storage so if anything goes down in any part of your network - your NAS or other network storage volumes become inaccessible - you will have a cache of files that can be played.

The media files bitrate doesn't affect the size of proxy, because during building proxy video and audio files are re-compressed using the predefined compression settings, which are set in the Playout configuration tool -> Proxy tab. It ensures the most optimal and smooth data allocating; such data can be read from the disk smoothly and fast. Storing data on the local disk, we avoid any network related issues.
Video, audio and VANC data are cached into separate files.

To calculate the necessary volume of the drive for proxy, take into consideration the following.
For instance, you use media files of 1080i25 format and the “Best performance” proxy rendering preset. The compression ratio of this preset equals 4. There are 2 bytes of information in one pixel.
One-hour video takes: (1920х1080х2) / 4 compression х 25 fps х 60 sec х 60 min = ~ 90 GB
Plus extra disk space for audio tracks and VANC. About 0.66 GB for 1 hour of audio (one audio track) and 0.5 Gb for 1 hour of the VANC data.
So for 24 hours you will need about 2 TB of proxy disk space. This concerns a playlist comprised of absolutely unique items, which are not repeating.
Besides the proxy folder is being cleaned from time to time: the items that were played long time ago are cleaned in order to free space for rendering of the next items.

If you wish to decrease the proxy size, there are the following variants:
You can choose the "High quality" rendering preset - it gives better quality but significantly increases the CPU load, the disk performance becomes lower.

To decrease CPU load you can adjust "Throttle speed" option. It is used to set the proxy speed limit. As a result, the CPU usage will be decreased by increasing proxy time. So, if you set 100% for example, the process will be performed slowly, but CPU usage will be smaller. If you set 250, it will increase CPU load and speed up the process.
If you select too small value, proxy might not finish the process before video item is played back. But if you use long playlists (day-long, for example), it might be enough in case if you have a big enough proxy folder.
But if you have small proxy folder, the program will be unable to proxy all items from the playlist and it might cause direct reading of the files because there is not enough time for the proxying.

Finally, it depends on you to choose the proper option for your particular case and determine what the best configuration.