The documentation is trying to say that the noProxy value in the Proxy.config spec will be updated to reflect the values that are in the network config spec but it is conflating the two custom resource schemas.    

apiVersion: config.openshift.io/v1
kind: Proxy
metadata:
  name: cluster
# ...
networking:
  clusterNetwork: 
  - cidr: <ip_address_from_cidr>
    hostPrefix: 23
  network type: OVNKubernetes
  machineNetwork: 
  - cidr: <ip_address_from_cidr>
  serviceNetwork: 
  - 172.30.0.0/16
# ...
status:
  noProxy:
  - localhost
  - .cluster.local
  - .svc
  - 127.0.0.1
  - <api_server_internal_url> 
# ...