They definitely didn’t just stop tracking you because this option exists.

Cookies are a non-issue. They store data only locally and can be edited and removed at will. With third party isolation on by default there’s really no reason to worry about them much anymore. And if you do just install cookie auto-delete to clean things up.

This variant is definitely worse because the data is no longer just local.

I am, no worries.

Using reverse proxies is common enough now that quite a few apps can deal with subpaths, and for the ones that can’t you can generally get nginx to rewrite the paths for you to make things work.