When CREATE_PRIVATE_REPO_ON_PUSH is set to false, the proxy code [1] will continue creating repositories as private.
The create_repository function conditionally creates the repository privately based on the visibility flag, which is by default set to private[2].
An example of conditionally setting this flag based on the CREATE_PRIVATE_REPO_ON_PUSH can be found in the v2/auth code[3].

ACCEPTANCE CRITERIA

• repositories auto-created via pull-thru cache are made public or private by default depending on the CREATE_PRIVATE_REPO_ON_PUSH config
• the previous point is covered by unitary tests

[1] https://github.com/quay/quay/blob/master/data/registry_model/registry_proxy_model.py?plain=1#L115
[2] https://github.com/quay/quay/blob/master/data/model/repository.py?plain=1#L130
[3] https://github.com/quay/quay/blob/master/endpoints/v2/v2auth.py?plain=1#L280-L284