Strange info in "Bypass Proxy Settings for These Hosts and Domains"

For my Mac Mini my Network IP Address always has a self-assigned 169.254 number that I cannot change. Strangely, this same IP number is similar to info that is in the Proxies section (of Network Settings) under "Bypass Proxy Settings for These Hosts and Domains".
No matter what I do, this info (*,local, 169.254/16) appears in my Network Settings in the Proxies section under "Bypass Proxy Settings for These Hosts and Domains". (I tried removing the info and it would cause the "Configure Proxies" selection to default to "Always Use PAC File". Had to go back and retrash all the plist files to have Proxies go back to "Configure Proxies-Manually". Still, the info (*,local, 169.254/16) continues to appear in the "Bypass Proxy Settings for These Hosts and Domains" section and my IP address is always a 169.254 number.)
Comcast cable modem via direct hardwired Ethernet works fine with my other computer, so not the modem. Also, other computer does not have any info in the "Bypass Proxy Settings for These Hosts and Domains" section.
Installed a fresh copy of OS X 11.5 on a new hard drive. Still the same problem.
I posted this issue before but only got one responder and the problem still exists. Any clues? Somebody must know about this stuff. Help please.
Thanks

When your Mac wakes up, it does not yet have an IP Addresss. It wants to send a request to a Router for an apprpriste IP address to use now. But it needs to have an IP address (like a return address) to receive any messages. So, ... wait for it,
... it (your Mac) makes one up. There are rules that ensure it is a random address, but they always start with 169.254. It is on the same subnet with any low-order 16 bits This is the "self-assigned" range of IP Addresses. This address is only good for talking on a local network segment, for things like asking for a valid IP Address from a DHCP-enabled Router.
In most cases, on most networks, the 169.254 self-assigned IP Address is replaced by a valid Local IP Address such as 192.168.xxx yyy or 10.0.xxx.yyy so quickly that you never even see the 169.254 Address.
If you do see the 169.254 Address, it can be read as "Nobody will talk to me" or "Nobody will give me an IP Address". When you have this IP Address for more than an instant, you should suspect bad cables for Ethernet connections, bad signal strength or interference for wireless, Router configuration problems, or Mac configuration problems.
Mac configuration problems are often solved by using the "Assist Me" button is System Preferences > Network  and choosing to set up again.
Another diagnostic is to try using Network Utility and the Ping function, and Ping-ing the address of your Airport base Station, often 192.168.0.1 or 10.0.0.1 or similar. This will tell you if the Router is reachable, or there are cabling/wirelss signal problems.
In this case, proxies are not an issue, and are simply a distraction from the real problems.

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