I just guess, but I have a feeling that you can abuse curly braces. Are you trying to replace the PROXY_USER environment variable instead? Typically, braces are used to start a new block of statements.
$Env:PROXY_USER
Alternatively, you can encapsulate this proxy information inside a string to make sure that it is treated as a single argument:
"$Env: PROXY_USER@ $Env:PROXY_HOST:$Env:PROXY_DIR"
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