@ejona86 new ServerSocket(0, 0, InetAddress.getLoopbackAddress()) solved the problem!

Now proxy_immediateServerClose succeeds:

suztomo-macbookpro44% git diff                                                                                
diff --git a/okhttp/src/test/java/io/grpc/okhttp/OkHttpClientTransportTest.java b/okhttp/src/test/java/io/grpc/okhttp/OkHttpClientTransportTest.java
index 0994bc900..b59aea9c1 100644
--- a/okhttp/src/test/java/io/grpc/okhttp/OkHttpClientTransportTest.java
+++ b/okhttp/src/test/java/io/grpc/okhttp/OkHttpClientTransportTest.java
@@ -1963,7 +1963,7 @@ public class OkHttpClientTransportTest {
 
   @Test
   public void proxy_immediateServerClose() throws Exception {
-    ServerSocket serverSocket = new ServerSocket(0);
+    ServerSocket serverSocket = new ServerSocket(0, 0, InetAddress.getLoopbackAddress());
     InetSocketAddress targetAddress = InetSocketAddress.createUnresolved("theservice", 80);
     clientTransport = new OkHttpClientTransport(
         targetAddress,
@@ -1985,6 +1985,12 @@ public class OkHttpClientTransportTest {
         transportTracer,
         false);
     clientTransport.start(transportListener);
+    org.mockito.Mockito.doAnswer(new org.mockito.stubbing.Answer<Void>() {
+      @Override public Void answer(org.mockito.invocation.InvocationOnMock invocation) {
+        System.out.println(Arrays.asList(invocation.getArguments()));
+        return null;
+      }
+    }).when(transportListener).transportShutdown(any(Status.class));
 
     Socket sock = serverSocket.accept();
     serverSocket.close();
suztomo-macbookpro44%  ./gradlew cleanTest  :grpc-okhttp:test --tests=io.grpc.okhttp.OkHttpClientTransportTest
*** Skipping the build of codegen and compilation of proto files because skipCodegen=true
  * Skipping the build of Android projects because skipAndroid=true

> Task :grpc-okhttp:test

io.grpc.okhttp.OkHttpClientTransportTest > proxy_200 FAILED
    org.junit.runners.model.TestTimedOutException: test timed out after 10 seconds
        at java.net.PlainSocketImpl.socketAccept(Native Method)
        at java.net.AbstractPlainSocketImpl.accept(AbstractPlainSocketImpl.java:409)
        at java.net.ServerSocket.implAccept(ServerSocket.java:545)
        at java.net.ServerSocket.accept(ServerSocket.java:513)
        at io.grpc.okhttp.OkHttpClientTransportTest.proxy_200(OkHttpClientTransportTest.java:1876)

io.grpc.okhttp.OkHttpClientTransportTest > proxy_500 FAILED
    org.junit.runners.model.TestTimedOutException: test timed out after 10 seconds
        at java.net.PlainSocketImpl.socketAccept(Native Method)
        at java.net.AbstractPlainSocketImpl.accept(AbstractPlainSocketImpl.java:409)
        at java.net.ServerSocket.implAccept(ServerSocket.java:545)
        at java.net.ServerSocket.accept(ServerSocket.java:513)
        at io.grpc.okhttp.OkHttpClientTransportTest.proxy_500(OkHttpClientTransportTest.java:1933)

68 tests completed, 2 failed

> Task :grpc-okhttp:test FAILED

FAILURE: Build failed with an exception.

* What went wrong:
Execution failed for task ':grpc-okhttp:test'.
> There were failing tests. See the report at: file:///Users/suztomo/grpc-java/okhttp/build/reports/tests/test/index.html

* Try:
Run with --stacktrace option to get the stack trace. Run with --info or --debug option to get more log output. Run with --scan to get full insights.

* Get more help at https://help.gradle.org

BUILD FAILED in 36s

This time standard output captured the invocation argument:

[Status{code=UNAVAILABLE, description=Failed trying to connect with proxy, cause=java.net.SocketException: Connection reset
	at java.net.SocketInputStream.read(SocketInputStream.java:210)
	at java.net.SocketInputStream.read(SocketInputStream.java:141)
	at okio.Okio$2.read(Okio.java:140)
	at okio.AsyncTimeout$2.read(AsyncTimeout.java:237)
	at io.grpc.okhttp.OkHttpClientTransport.readUtf8LineStrictUnbuffered(OkHttpClientTransport.java:731)
	at io.grpc.okhttp.OkHttpClientTransport.createHttpProxySocket(OkHttpClientTransport.java:680)
	at io.grpc.okhttp.OkHttpClientTransport.access$1100(OkHttpClientTransport.java:109)
	at io.grpc.okhttp.OkHttpClientTransport$4.run(OkHttpClientTransport.java:559)
	at io.grpc.internal.SerializingExecutor.run(SerializingExecutor.java:123)
	at java.util.concurrent.ThreadPoolExecutor.runWorker(ThreadPoolExecutor.java:1149)
	at java.util.concurrent.ThreadPoolExecutor$Worker.run(ThreadPoolExecutor.java:624)
	at java.lang.Thread.run(Thread.java:748)
}]

@ejona86 @sanjaypujare Thank you for your help in troubleshooting!

My Memo

Why ServerSocket(0) does not work? ServerSocket(0) is ServerSocket(port: 0, backlog: 50, bindAddr: null).

(ServerSocket serverSocket = new ServerSocket(0, 50, loopbackAddress); also works good.)

https://docs.oracle.com/javase/8/docs/api/java/net/ServerSocket.html says:

If bindAddr is null, it will default accepting connections on any/all local addresses.

InetAddress.getLoopbackAddress() returns Inet4Address@2726 localhost/127.0.0.1.

How about ServerSocket(0, 50, null)?

This timed out… (Of course ServerSocket(0) is the alias to ServerSocket(0, 50, null))

ServerSocket serverSocket = new ServerSocket(0, 50, null);

How about 0.0.0.0?

This timed out…

    InetAddress ipAddrAny = InetAddress.getByAddress(new byte[]{0, 0, 0, 0});
    ServerSocket serverSocket = new ServerSocket(0, 50, ipAddrAny);

How about 127.0.0.1?

This worked!

    InetAddress localhost = InetAddress.getByAddress(new byte[]{127, 0, 0, 1});
    ServerSocket serverSocket = new ServerSocket(0, 50, localhost);

Any security system that blocks listening on 0.0.0.0 port 80?

In my Mac, nc command can listen on 0.0.0.0 port 80.

What’s the difference in the client code?

when I use InetAddress.getLoopbackAddress(), then the client’s SocketFactory.createSocket takes 127.0.0.1.

In the bad case, the client was trying to create a socket to 0.0.0.0 (screenshot). As per https://serverfault.com/a/300408 (which mentions https://tools.ietf.org/html/rfc1122#page-30 ), address 0.0.0.0 must not be sent.

How about specifying proxyAddress with InetAddress.getLoopbackAddress?

The code below also worked and clarifies the difference between the bad case and good case:

diff --git a/okhttp/src/test/java/io/grpc/okhttp/OkHttpClientTransportTest.java b/okhttp/src/test/java/io/grpc/okhttp/OkHttpClientTransportTest.java
index 0994bc900..359675374 100644
--- a/okhttp/src/test/java/io/grpc/okhttp/OkHttpClientTransportTest.java
+++ b/okhttp/src/test/java/io/grpc/okhttp/OkHttpClientTransportTest.java
@@ -1965,6 +1965,10 @@ public class OkHttpClientTransportTest {
   public void proxy_immediateServerClose() throws Exception {
     ServerSocket serverSocket = new ServerSocket(0);
     InetSocketAddress targetAddress = InetSocketAddress.createUnresolved("theservice", 80);
+    InetSocketAddress proxyAddress = new InetSocketAddress(
+        InetAddress.getLoopbackAddress(),
+        serverSocket.getLocalPort()
+    );
     clientTransport = new OkHttpClientTransport(
         targetAddress,
         "authority",
@@ -1979,7 +1983,7 @@ public class OkHttpClientTransportTest {
         INITIAL_WINDOW_SIZE,
         HttpConnectProxiedSocketAddress.newBuilder()
             .setTargetAddress(targetAddress)
-            .setProxyAddress(serverSocket.getLocalSocketAddress()).build(),
+            .setProxyAddress(proxyAddress).build(),
         tooManyPingsRunnable,
         DEFAULT_MAX_INBOUND_METADATA_SIZE,
         transportTracer,