Add the health engine: through-proxy probes, thresholds, channel-fed transitions

Co-Authored-By: Claude <noreply@anthropic.com>

.claude/settings.json

@@ -44,13 +44,34 @@
       "Bash(cd /Users/jan.novak/srv/go/egress-proxies-operator *)",
       "Bash(echo \"build: $?\")",
       "Bash(echo \"vet: $?\")",
-      "Bash(perl -i -pe 's{^\\\\t\\\\t\\\\t\\\\t\\\\t// TODO\\\\\\(user\\\\\\): Specify other spec details if needed\\\\.\\\\n}{\\\\t\\\\t\\\\t\\\\t\\\\t// A minimal, schema-valid spec so this placeholder test survives the\\\\n\\\\t\\\\t\\\\t\\\\t\\\\t// CEL/CRD validation added in Step 1. Rewritten wholesale in Step 4\\\\n\\\\t\\\\t\\\\t\\\\t\\\\t// alongside the real reconciler and envtest suite.\\\\n\\\\t\\\\t\\\\t\\\\t\\\\tSpec: crawlv1alpha1.ProxySpec{\\\\n\\\\t\\\\t\\\\t\\\\t\\\\t\\\\tMode:     crawlv1alpha1.ModeExternal,\\\\n\\\\t\\\\t\\\\t\\\\t\\\\t\\\\tEndpoint: &crawlv1alpha1.EndpointSpec{Host: \"10.0.0.1\"},\\\\n\\\\t\\\\t\\\\t\\\\t\\\\t},\\\\n}' internal/controller/proxy_controller_test.go)"
+      "Bash(perl -i -pe 's{^\\\\t\\\\t\\\\t\\\\t\\\\t// TODO\\\\\\(user\\\\\\): Specify other spec details if needed\\\\.\\\\n}{\\\\t\\\\t\\\\t\\\\t\\\\t// A minimal, schema-valid spec so this placeholder test survives the\\\\n\\\\t\\\\t\\\\t\\\\t\\\\t// CEL/CRD validation added in Step 1. Rewritten wholesale in Step 4\\\\n\\\\t\\\\t\\\\t\\\\t\\\\t// alongside the real reconciler and envtest suite.\\\\n\\\\t\\\\t\\\\t\\\\t\\\\tSpec: crawlv1alpha1.ProxySpec{\\\\n\\\\t\\\\t\\\\t\\\\t\\\\t\\\\tMode:     crawlv1alpha1.ModeExternal,\\\\n\\\\t\\\\t\\\\t\\\\t\\\\t\\\\tEndpoint: &crawlv1alpha1.EndpointSpec{Host: \"10.0.0.1\"},\\\\n\\\\t\\\\t\\\\t\\\\t\\\\t},\\\\n}' internal/controller/proxy_controller_test.go)",
+      "Bash(go tool *)",
+      "Bash(docker version *)",
+      "Bash(curl -sI --max-time 5 https://hub.docker.com)",
+      "Bash(kind get *)",
+      "Bash(curl -s --max-time 5 \"https://hub.docker.com/v2/repositories/ubuntu/squid/tags?page_size=10\")",
+      "Bash(python3 -c ' *)",
+      "Bash(curl -s --max-time 5 \"https://hub.docker.com/v2/repositories/ubuntu/squid/tags?page_size=100\")",
+      "Bash(go doc *)",
+      "Bash(go list *)",
+      "Bash(gofmt -w internal/provider/config.go)",
+      "Bash(gofmt -l .)",
+      "Bash(git restore *)",
+      "Bash(make manifests *)",
+      "Bash(make test *)",
+      "Bash(KUBEBUILDER_ASSETS=\"/Users/jan.novak/srv/go/egress-proxies-operator/bin/k8s/1.36.2-darwin-arm64\" go test -race ./internal/controller/)",
+      "Bash(grep -n 'func Channel' -A8 __CMDSUB_OUTPUT__/sigs.k8s.io/controller-runtime@v0.24.1/pkg/source/source.go)",
+      "Bash(grep -n 'type GenericEvent' __CMDSUB_OUTPUT__/sigs.k8s.io/controller-runtime@v0.24.1/pkg/event/event.go)",
+      "Bash(KUBEBUILDER_ASSETS=__TRACKED_VAR__/bin/k8s/1.36.2-darwin-arm64 go test -race ./...)",
+      "Bash(cat >> *)"
     ],
     "additionalDirectories": [
       "/Users/jan.novak/srv/go/egress-proxies-operator/.claude",
       "/Users/jan.novak/srv/go/egress-proxies-operator/docs/plans",
       "/Users/jan.novak/srv/go/egress-proxies-operator/docs",
-      "/Users/jan.novak/srv/go/egress-proxies-operator/docs/prompts"
+      "/Users/jan.novak/srv/go/egress-proxies-operator/docs/prompts",
+      "/tmp",
+      "/Users/jan.novak/srv/go/egress-proxies-operator/docs/plans-executions"
     ]
   }
 }

cmd/main.go

@@ -33,7 +33,6 @@ import (
 	"sigs.k8s.io/controller-runtime/pkg/log/zap"
 	"sigs.k8s.io/controller-runtime/pkg/metrics/filters"
 	metricsserver "sigs.k8s.io/controller-runtime/pkg/metrics/server"
-	"sigs.k8s.io/controller-runtime/pkg/webhook"
 
 	crawlv1alpha1 "gitea.home.hrajfrisbee.cz/kacerr/egress-proxies-operator/api/v1alpha1"
 	"gitea.home.hrajfrisbee.cz/kacerr/egress-proxies-operator/internal/controller"
@@ -56,7 +55,6 @@ func init() {
 func main() {
 	var metricsAddr string
 	var metricsCertPath, metricsCertName, metricsCertKey string
-	var webhookCertPath, webhookCertName, webhookCertKey string
 	var enableLeaderElection bool
 	var probeAddr string
 	var secureMetrics bool
@@ -70,15 +68,12 @@ func main() {
 			"Enabling this will ensure there is only one active controller manager.")
 	flag.BoolVar(&secureMetrics, "metrics-secure", true,
 		"If set, the metrics endpoint is served securely via HTTPS. Use --metrics-secure=false to use HTTP instead.")
-	flag.StringVar(&webhookCertPath, "webhook-cert-path", "", "The directory that contains the webhook certificate.")
-	flag.StringVar(&webhookCertName, "webhook-cert-name", "tls.crt", "The name of the webhook certificate file.")
-	flag.StringVar(&webhookCertKey, "webhook-cert-key", "tls.key", "The name of the webhook key file.")
 	flag.StringVar(&metricsCertPath, "metrics-cert-path", "",
 		"The directory that contains the metrics server certificate.")
 	flag.StringVar(&metricsCertName, "metrics-cert-name", "tls.crt", "The name of the metrics server certificate file.")
 	flag.StringVar(&metricsCertKey, "metrics-cert-key", "tls.key", "The name of the metrics server key file.")
 	flag.BoolVar(&enableHTTP2, "enable-http2", false,
-		"If set, HTTP/2 will be enabled for the metrics and webhook servers")
+		"If set, HTTP/2 will be enabled for the metrics server")
 	opts := zap.Options{
 		Development: true,
 	}
@@ -102,23 +97,6 @@ func main() {
 		tlsOpts = append(tlsOpts, disableHTTP2)
 	}
 
-	// Initial webhook TLS options
-	webhookTLSOpts := tlsOpts
-	webhookServerOptions := webhook.Options{
-		TLSOpts: webhookTLSOpts,
-	}
-
-	if len(webhookCertPath) > 0 {
-		setupLog.Info("Initializing webhook certificate watcher using provided certificates",
-			"webhook-cert-path", webhookCertPath, "webhook-cert-name", webhookCertName, "webhook-cert-key", webhookCertKey)
-
-		webhookServerOptions.CertDir = webhookCertPath
-		webhookServerOptions.CertName = webhookCertName
-		webhookServerOptions.KeyName = webhookCertKey
-	}
-
-	webhookServer := webhook.NewServer(webhookServerOptions)
-
 	// Metrics endpoint is enabled in 'config/default/kustomization.yaml'. The Metrics options configure the server.
 	// More info:
 	// - https://pkg.go.dev/sigs.k8s.io/controller-runtime@v0.24.1/pkg/metrics/server
@@ -139,12 +117,8 @@ func main() {
 
 	// If the certificate is not specified, controller-runtime will automatically
 	// generate self-signed certificates for the metrics server. While convenient for development and testing,
-	// this setup is not recommended for production.
-	//
-	// TODO(user): If you enable certManager, uncomment the following lines:
-	// - [METRICS-WITH-CERTS] at config/default/kustomization.yaml to generate and use certificates
-	// managed by cert-manager for the metrics server.
-	// - [PROMETHEUS-WITH-CERTS] at config/prometheus/kustomization.yaml for TLS certification.
+	// this setup is not recommended for production. This project doesn't use cert-manager (no admission
+	// webhooks, no other consumer of managed certs) -- pass real certs via the flags below if needed.
 	if len(metricsCertPath) > 0 {
 		setupLog.Info("Initializing metrics certificate watcher using provided certificates",
 			"metrics-cert-path", metricsCertPath, "metrics-cert-name", metricsCertName, "metrics-cert-key", metricsCertKey)
@@ -157,7 +131,6 @@ func main() {
 	mgr, err := ctrl.NewManager(ctrl.GetConfigOrDie(), ctrl.Options{
 		Scheme:                 scheme,
 		Metrics:                metricsServerOptions,
-		WebhookServer:          webhookServer,
 		HealthProbeBindAddress: probeAddr,
 		LeaderElection:         enableLeaderElection,
 		LeaderElectionID:       "b47711d1.example.com",

config/crd/kustomization.yaml

@@ -4,13 +4,3 @@
 resources:
 - bases/crawl.example.com_proxies.yaml
 # +kubebuilder:scaffold:crdkustomizeresource
-
-patches:
-# [WEBHOOK] To enable webhook, uncomment all the sections with [WEBHOOK] prefix.
-# patches here are for enabling the conversion webhook for each CRD
-# +kubebuilder:scaffold:crdkustomizewebhookpatch
-
-# [WEBHOOK] To enable webhook, uncomment the following section
-# the following config is for teaching kustomize how to do kustomization for CRDs.
-#configurations:
-#- kustomizeconfig.yaml

config/crd/kustomizeconfig.yaml

@@ -1,12 +0,0 @@
-# This file is for teaching kustomize how to substitute name and namespace reference in CRD
-nameReference:
-- kind: Service
-  version: v1
-  fieldSpecs:
-  - kind: CustomResourceDefinition
-    version: v1
-    group: apiextensions.k8s.io
-    path: spec/conversion/webhook/clientConfig/service/name
-
-varReference:
-- path: metadata/annotations

config/default/kustomization.yaml

@@ -18,20 +18,10 @@ resources:
 - ../crd
 - ../rbac
 - ../manager
-# [WEBHOOK] To enable webhook, uncomment all the sections with [WEBHOOK] prefix including the one in
-# crd/kustomization.yaml
-#- ../webhook
-# [CERTMANAGER] To enable cert-manager, uncomment all sections with 'CERTMANAGER'. 'WEBHOOK' components are required.
-#- ../certmanager
 # [PROMETHEUS] To enable prometheus monitor, uncomment all sections with 'PROMETHEUS'.
 #- ../prometheus
 # [METRICS] Expose the controller manager metrics service.
 - metrics_service.yaml
-# [NETWORK POLICY] Protect the /metrics endpoint and Webhook Server with NetworkPolicy.
-# Only Pod(s) running a namespace labeled with 'metrics: enabled' will be able to gather the metrics.
-# Only CR(s) which requires webhooks and are applied on namespaces labeled with 'webhooks: enabled' will
-# be able to communicate with the Webhook Server.
-#- ../network-policy
 
 # Uncomment the patches line if you enable Metrics
 patches:
@@ -48,14 +38,9 @@ patches:
 #  target:
 #    kind: Deployment
 
-# [WEBHOOK] To enable webhook, uncomment all the sections with [WEBHOOK] prefix including the one in
-# crd/kustomization.yaml
-#- path: manager_webhook_patch.yaml
-#  target:
-#    kind: Deployment
-
-# [CERTMANAGER] To enable cert-manager, uncomment all sections with 'CERTMANAGER' prefix.
-# Uncomment the following replacements to add the cert-manager CA injection annotations
+# [METRICS-WITH-CERTS] Uncomment the following replacements together with the patch
+# above to wire the metrics Service name/namespace into the cert-manager Certificate
+# and the Prometheus ServiceMonitor TLS config.
 #replacements:
 # - source: # Uncomment the following block to enable certificates for metrics
 #     kind: Service
@@ -116,119 +101,3 @@ patches:
 #         delimiter: '.'
 #         index: 1
 #         create: true
-
-# - source: # Uncomment the following block if you have any webhook
-#     kind: Service
-#     version: v1
-#     name: webhook-service
-#     fieldPath: .metadata.name # Name of the service
-#   targets:
-#     - select:
-#         kind: Certificate
-#         group: cert-manager.io
-#         version: v1
-#         name: serving-cert
-#       fieldPaths:
-#         - .spec.dnsNames.0
-#         - .spec.dnsNames.1
-#       options:
-#         delimiter: '.'
-#         index: 0
-#         create: true
-# - source:
-#     kind: Service
-#     version: v1
-#     name: webhook-service
-#     fieldPath: .metadata.namespace # Namespace of the service
-#   targets:
-#     - select:
-#         kind: Certificate
-#         group: cert-manager.io
-#         version: v1
-#         name: serving-cert
-#       fieldPaths:
-#         - .spec.dnsNames.0
-#         - .spec.dnsNames.1
-#       options:
-#         delimiter: '.'
-#         index: 1
-#         create: true
-
-# - source: # Uncomment the following block if you have a ValidatingWebhook (--programmatic-validation)
-#     kind: Certificate
-#     group: cert-manager.io
-#     version: v1
-#     name: serving-cert # This name should match the one in certificate.yaml
-#     fieldPath: .metadata.namespace # Namespace of the certificate CR
-#   targets:
-#     - select:
-#         kind: ValidatingWebhookConfiguration
-#       fieldPaths:
-#         - .metadata.annotations.[cert-manager.io/inject-ca-from]
-#       options:
-#         delimiter: '/'
-#         index: 0
-#         create: true
-# - source:
-#     kind: Certificate
-#     group: cert-manager.io
-#     version: v1
-#     name: serving-cert
-#     fieldPath: .metadata.name
-#   targets:
-#     - select:
-#         kind: ValidatingWebhookConfiguration
-#       fieldPaths:
-#         - .metadata.annotations.[cert-manager.io/inject-ca-from]
-#       options:
-#         delimiter: '/'
-#         index: 1
-#         create: true
-
-# - source: # Uncomment the following block if you have a DefaultingWebhook (--defaulting )
-#     kind: Certificate
-#     group: cert-manager.io
-#     version: v1
-#     name: serving-cert
-#     fieldPath: .metadata.namespace # Namespace of the certificate CR
-#   targets:
-#     - select:
-#         kind: MutatingWebhookConfiguration
-#       fieldPaths:
-#         - .metadata.annotations.[cert-manager.io/inject-ca-from]
-#       options:
-#         delimiter: '/'
-#         index: 0
-#         create: true
-# - source:
-#     kind: Certificate
-#     group: cert-manager.io
-#     version: v1
-#     name: serving-cert
-#     fieldPath: .metadata.name
-#   targets:
-#     - select:
-#         kind: MutatingWebhookConfiguration
-#       fieldPaths:
-#         - .metadata.annotations.[cert-manager.io/inject-ca-from]
-#       options:
-#         delimiter: '/'
-#         index: 1
-#         create: true
-
-# - source: # Uncomment the following block if you have a ConversionWebhook (--conversion)
-#     kind: Certificate
-#     group: cert-manager.io
-#     version: v1
-#     name: serving-cert
-#     fieldPath: .metadata.namespace # Namespace of the certificate CR
-#   targets: # Do not remove or uncomment the following scaffold marker; required to generate code for target CRD.
-# +kubebuilder:scaffold:crdkustomizecainjectionns
-# - source:
-#     kind: Certificate
-#     group: cert-manager.io
-#     version: v1
-#     name: serving-cert
-#     fieldPath: .metadata.name
-#   targets: # Do not remove or uncomment the following scaffold marker; required to generate code for target CRD.
-# +kubebuilder:scaffold:crdkustomizecainjectionname

config/manager/kustomization.yaml

@@ -1,2 +1,8 @@
 resources:
 - manager.yaml
+apiVersion: kustomize.config.k8s.io/v1beta1
+kind: Kustomization
+images:
+- name: controller
+  newName: example.com/egress-proxies-operator
+  newTag: v0.0.1

config/network-policy/allow-metrics-traffic.yaml

@@ -1,27 +0,0 @@
-# This NetworkPolicy allows ingress traffic
-# with Pods running on namespaces labeled with 'metrics: enabled'. Only Pods on those
-# namespaces are able to gather data from the metrics endpoint.
-apiVersion: networking.k8s.io/v1
-kind: NetworkPolicy
-metadata:
-  labels:
-    app.kubernetes.io/name: egress-proxies-operator
-    app.kubernetes.io/managed-by: kustomize
-  name: allow-metrics-traffic
-  namespace: system
-spec:
-  podSelector:
-    matchLabels:
-      control-plane: controller-manager
-      app.kubernetes.io/name: egress-proxies-operator
-  policyTypes:
-    - Ingress
-  ingress:
-    # This allows ingress traffic from any namespace with the label metrics: enabled
-    - from:
-      - namespaceSelector:
-          matchLabels:
-            metrics: enabled  # Only from namespaces with this label
-      ports:
-        - port: 8443
-          protocol: TCP

config/network-policy/kustomization.yaml

@@ -1,2 +0,0 @@
-resources:
-- allow-metrics-traffic.yaml

config/rbac/role.yaml

@@ -4,6 +4,14 @@ kind: ClusterRole
 metadata:
   name: manager-role
 rules:
+- apiGroups:
+  - ""
+  resources:
+  - secrets
+  verbs:
+  - get
+  - list
+  - watch
 - apiGroups:
   - crawl.example.com
   resources:

docs/architecture.md

@@ -0,0 +1,185 @@
+# Architecture
+
+> **Status:** the operator is built through Step 5 (health engine) of
+> [docs/plans/2026-08-07-1747-proxy-operator.md](plans/2026-08-07-1747-proxy-operator.md).
+> This document currently covers the event/reconcile flow; the components
+> table and the Decisions section arrive with Step 10, and the diagrams
+> below grow as the lease store, discovery API, and orphan GC land.
+
+## Event flow: cluster events → reconciler functions
+
+Which functions run in response to which Kubernetes cluster events, as
+wired in `internal/controller/proxy_controller.go`.
+
+### 1. How cluster events reach the reconciler
+
+```text
+KUBERNETES CLUSTER EVENTS                                (wiring: SetupWithManager,
+─────────────────────────                                 proxy_controller.go)
+
+ Proxy CR created / spec edited /     Secret created /           health transition
+ status patched / delete requested    updated / deleted          (engine, see §6)
+              │                              │                          │
+   watch: For(&crawlv1alpha1.Proxy{})   watch: Watches(          WatchesRawSource(
+              │                         &corev1.Secret{}, ...)   source.Channel(
+              │                              │                    r.HealthEvents, ...))
+              │                r.proxiesForSecret(ctx, secret)          │
+              │                  │ r.List(Proxies in namespace)         │
+              │                  │ keeps those whose                    │
+              │                  │ spec.cloudInit.secretRef matches     │
+              │                  ▼                                      │
+              │                [reconcile.Request per matching Proxy]   │
+              ▼                              │                          │
+        ┌────────────────────────────────────┴──────────────────────────┴──┐
+        │                controller-runtime workqueue                      │◄── RequeueAfter
+        │  (dedup by namespace/name, rate-limited,                         │    timers
+        │   MaxConcurrentReconciles: 3)                                    │◄── error backoff
+        └──────────────────────────┬────────────────────────────────────────┘
+                                   ▼
+                    ProxyReconciler.Reconcile(ctx, req)
+```
+
+The Secret watch makes *rotating a cloud-init Secret* a first-class event:
+it re-enqueues every Proxy referencing that Secret, which is how secret
+rotation triggers VM replacement even though the Proxy spec is untouched.
+
+### 2. Inside `Reconcile` — dispatch and the single status write
+
+```text
+Reconcile(ctx, req)
+  │ r.Get(ctx, req.NamespacedName, &p)          ── fetch the Proxy (NotFound → done)
+  │ base := p.DeepCopy()                        ── snapshot for the diff
+  │ defer patchStatusIfChanged(ctx, base, &p) ──────────────────────────┐
+  │                                                                     │
+  ├─ p.DeletionTimestamp set ──► reconcileDelete(ctx, &p)               │
+  ├─ p.Spec.Mode == External ──► reconcileExternal(ctx, &p)             │
+  └─ otherwise (Managed) ──────► reconcileManaged(ctx, &p)              │
+                                                                        ▼
+                                     patchStatusIfChanged  (status.go)
+                                       │ p.Status.ObservedGeneration = p.Generation
+                                       │ p.Status.Phase = computePhase(&p)
+                                       │ equality.Semantic.DeepEqual(base, p)?
+                                       └─ changed → r.Status().Patch(...)   ◄── the ONLY
+                                          unchanged → no API call               status write
+```
+
+### 3. `reconcileManaged` — the state machine
+
+```text
+reconcileManaged(ctx, p)
+  │
+  ├─ controllerutil.AddFinalizer? ──► r.Update ──► return {}        (watch event re-triggers)
+  ├─ permanent-failure latch (FindStatusCondition == PermanentError
+  │    at this generation) ──► return {}                            (silent until spec edit)
+  ├─ r.Providers[p.Spec.Provider] missing ──► setProvisioned(PermanentError) → Failed
+  │
+  ├─ resolveCloudInit(ctx, p) ──► r.Get(Secret) if secretRef        (error → CloudInitError + backoff)
+  ├─ hash := specHash(p, cloudInit)                                  (spechash.go)
+  │
+  ├─ status.providerID == "" ─────────► prov.Create(CreateRequest{Name: NameFromUID(p.UID), ...})
+  │                                       │ setSpecHash → r.Update (annotation)
+  │                                       └ stage providerID + Provisioned=False/Provisioning
+  │                                         ──► RequeueAfter: ProvisioningPoll
+  │
+  ├─ annotation != hash, annotation == "" ──► adopt: setSpecHash → r.Update
+  │                                           ──► RequeueAfter: RequeueNow
+  ├─ annotation != hash, annotation != "" ──► replaceInstance:
+  │                                             prov.Get ─ NotFound → setSpecHash, clear ID/IP
+  │                                             │            ──► RequeueNow (next pass creates)
+  │                                             └ exists  → prov.Delete, Provisioned=False/Replacing
+  │                                                          ──► RequeueAfter: DeletionPoll
+  │
+  └─ annotation == hash ──► prov.Get(providerID)
+        ├─ ErrNotFound      ──► clear ID/IP            ──► RequeueNow (next pass creates)
+        ├─ Provisioning     ──► Provisioned=False      ──► ProvisioningPoll
+        ├─ Running          ──► status.ip = inst.IP,
+        │                       Provisioned=True/Created,
+        │                       applyHealth (see §6)   ──► DriftPoll
+        └─ Stopped/Termin.  ──► prov.Delete (cattle)   ──► DeletionPoll
+
+  any provider error ──► providerFailure(p, err) ── provider.Class(err):
+        ├─ ErrQuotaExceeded ──► condition QuotaExceeded ──► RequeueAfter: QuotaRetry (nil error)
+        ├─ ErrPermanent     ──► condition PermanentError ──► phase Failed, no retry
+        └─ ErrTransient     ──► return err ──► workqueue exponential backoff
+```
+
+### 4. `reconcileDelete` and `reconcileExternal`
+
+```text
+reconcileDelete(ctx, p)                          reconcileExternal(ctx, p)
+  ├─ no finalizer ──► return {}                    │ status.ip = spec.endpoint.host
+  ├─ providerID == "" ──► RemoveFinalizer          │ setProvisioned(True/ExternalEndpoint)
+  │     → r.Update → object actually deleted       │ applyHealth (see §6)
+  ├─ prov.Get → ErrNotFound ──► RemoveFinalizer    └─ return {}   (no finalizer,
+  │     → r.Update → object actually deleted                       no provider calls ever)
+  └─ exists ──► prov.Delete
+        → Provisioned=False/Deleting
+        ──► RequeueAfter: DeletionPoll (poll until gone)
+```
+
+### 5. What provider calls do back in the cluster (kubernetes pod provider)
+
+```text
+prov.Create ──► buildPod (pure) ──► client.Create(corev1.Pod)   ─┐ these cause Pod events,
+prov.Get    ──► client.Get(Pod) → phase/IP → InstanceState       │ but the operator does NOT
+prov.Delete ──► client.Delete(Pod, tolerate NotFound)            │ watch Pods — it observes
+prov.ListByTag ─► client.List(Pods by labels, all namespaces)   ─┘ them by polling prov.Get
+                                                                    on each RequeueAfter tick
+```
+
+The reconciler never watches provider-side resources (Pods now, GCP VMs
+later). All instance-state observation is poll-based through the
+`Provider` interface, so the same flow works identically for a cloud API
+that has no watch mechanism at all.
+
+### 6. Health engine (`internal/health/`) — probes and transitions
+
+The engine is a leader-elected manager Runnable with its own goroutines,
+independent of the workqueue. It owns health *state*; the reconciler owns
+its *representation* in status — that split keeps exactly one writer of
+`.status` and makes write-only-on-transition fall out for free.
+
+```text
+Engine.Start(ctx)                                (engine.go)
+  ├─ spawns Workers (8) probe goroutines ◄─┐
+  └─ ticker loop (Tick = 1s):              │ jobs channel (non-blocking send;
+       tick(ctx, now, jobs)                │ saturated pool → retry next tick)
+         │ Reader.List(Proxies)  ── from the manager cache
+         │ per proxy: skip if no IP/host or deleting (state pruned →
+         │   a replaced instance starts with fresh counters)
+         │ newState: seed verdict from an existing Healthy condition
+         │   (leader handover), jitter first probe across the interval
+         │ due && !inFlight ──► jobs ◄── probe worker picks up
+         └ prune states for proxies gone from the cache
+                                           │
+              probe(ctx, proxyURL, hc, tls)   (probe.go)
+                │ fresh transport per probe, DisableKeepAlives=true
+                │   (load-bearing: keep-alives would cache the CONNECT
+                │    tunnel and later probes would never re-exercise it)
+                │ https probe URL ⇒ CONNECT through the proxy + TLS inside
+                └ success = err == nil AND expected status code
+                                           │
+              record(job, result, now)     ── under one mutex
+                │ counters: consecOK/consecFail; verdict flips only at
+                │   successThreshold / failureThreshold
+                │ emit ONLY on: first-ever verdict │ threshold flip │
+                │   latency Δ > max(20ms, 50% of reported) rate-limited
+                │   to one report per MinReportInterval (60s)
+                ▼
+        Events chan (buffered 64, non-blocking send;
+        on drop the reported markers do NOT advance → next probe retries)
+                │
+                ▼
+        source.Channel → workqueue → Reconcile        (see §1)
+                │
+                ▼
+        r.applyHealth(p)  ── reads Engine.Snapshot(key)   (status.go)
+              stages the Healthy condition + latencyMillis +
+              lastHealthCheckTime; computePhase turns Provisioned=True
+              + Healthy=True/False into phase Ready / Unhealthy
+```
+
+Consequence worth knowing: `status.lastHealthCheckTime` is the time of the
+last *status-affecting* probe, not the most recent probe — suppressed
+probes deliberately never write status. True probe recency will live in
+metrics (Step 9).

docs/plans-executions/2026-08-07-1747-proxy-operator.md

@@ -7,9 +7,9 @@ Pairs with [docs/plans/2026-08-07-1747-proxy-operator.md](../plans/2026-08-07-17
 - [x] Step 0 — Branch and scaffold
 - [x] Step 1 — API types (`api/v1alpha1/proxy_types.go`)
 - [x] Step 2 — Provider contract (`internal/provider/`)
-- [ ] Step 3 — Mock provider (`internal/provider/mock/`)
-- [ ] Step 4 — Reconciler (`internal/controller/`)
-- [ ] Step 5 — Health engine (`internal/health/`)
+- [x] Step 3 — Kubernetes pod provider (`internal/provider/kubernetes/`; first built as an in-memory mock, then replaced — see the two Step 3 sections below)
+- [x] Step 4 — Reconciler (`internal/controller/`)
+- [x] Step 5 — Health engine (`internal/health/`)
 - [ ] Step 6 — Lease store (`internal/lease/`)
 - [ ] Step 7 — Discovery API (`internal/discovery/`)
 - [ ] Step 8 — GCP provider (`internal/provider/gcp/`)
@@ -199,3 +199,498 @@ built in (rejects unknown fields, which is what "fail fast on unknown type"
 in the plan actually needs) and was already pulled in transitively by the
 k8s.io toolchain, so no new dependency was added — `go mod tidy` just
 promoted it from indirect to direct.
+
+## Step 3 — Mock provider (`internal/provider/mock/`)
+
+Started from the plan's design (state as a pure function of an injectable
+clock, no background timers) but had to redesign the "real proxy" part
+before writing any code, once a load-bearing assumption turned out false.
+
+The plan (and the earlier decision to make the mock run a real proxy)
+assumed each instance could get its own loopback address —
+`127.0.0.1:<port>` per instance, "a fake IP from a private range." Verified
+that assumption directly before committing to it:
+
+```bash
+cat <<'EOF' > /tmp/loopbacktest.go
+package main
+import ("fmt"; "net")
+func main() {
+	for _, addr := range []string{"127.0.0.2:0", "127.0.0.55:0", "127.1.2.3:0"} {
+		l, err := net.Listen("tcp", addr)
+		if err != nil { fmt.Printf("%s: FAIL: %v\n", addr, err); continue }
+		fmt.Printf("%s: OK\n", addr)
+		l.Close()
+	}
+}
+EOF
+go run /tmp/loopbacktest.go
+# 127.0.0.2:0: FAIL: listen tcp 127.0.0.2:0: bind: can't assign requested address
+# 127.0.0.55:0: FAIL: listen tcp 127.0.0.55:0: bind: can't assign requested address
+# 127.1.2.3:0: FAIL: listen tcp 127.1.2.3:0: bind: can't assign requested address
+```
+
+Only `127.0.0.1` binds on macOS without `sudo ifconfig lo0 alias ... up` —
+Linux routes the whole `127.0.0.0/8` block to loopback by default, macOS
+doesn't. That's not something the operator can or should do at runtime, so
+per-instance loopback IPs were out. There's also a second problem the
+per-instance-IP design didn't solve anyway: `EffectivePort()`
+(`api/v1alpha1/helpers.go`, Step 1) is computed purely from `spec.port`
+with no channel for a provider to report back a different *port* — so
+whatever a mock instance actually listens on has to be the literal port the
+reconciler will pass through `CreateRequest.Port`, not an OS-assigned
+ephemeral one.
+
+Redesigned around one real listener **per port**, shared and
+reference-counted across every instance that uses it, rather than one
+listener per instance (`proxy.go`, `sharedProxies`). This fixes both
+problems at once: every instance binds the same `127.0.0.1` (no OS issue),
+and any number of instances can share a port without conflict since it's
+the exact same underlying listener. Deliberately made the refcounting
+**package-level**, not a field on `mock.Provider`, because a bound TCP port
+is a genuinely process-global OS resource — two separately configured
+mock-typed provider entries (e.g. two named `"mock"` instances in
+`providers-config.yaml`) would otherwise both try to bind the same default
+port and the second one would just fail. This is a case where a package
+global is the correct model, not a shortcut: it mirrors an OS-level
+singleton, not application state.
+
+Instance lifecycle otherwise follows the plan exactly: `Get`/`ListByTag`
+derive `Provisioning → Running → Terminated → purged (ErrNotFound)` from
+`createdAt`/`deletedAt` compared against an injectable clock, with the real
+proxy listener acquired lazily on the first observed `Running` and released
+on `Delete` (or lazily on purge, so orphaned records can't leak a
+reference). `Create` is idempotent by name. Fault injection is wired both
+ways per the plan: `MockConfig.FailNextCreates`/`FailWith` for the demo
+config, `InjectCreateFailures(n, class)` for tests.
+
+Tests initially had a real flake, caught by running with `-race -count=3`
+rather than trusting one green run:
+
+```bash
+go test -race -v ./internal/provider/mock/... 2>&1 | tail -5
+# --- FAIL: TestAcquireProxy_sharedAcrossAcquires
+#     proxy_test.go:37: port not released after last reference: bind: address already in use
+```
+
+Root cause wasn't the refcounting logic — it was the test helper. `freePort`
+asked the OS for a free port by binding to `:0` and immediately closing it,
+which is a classic TOCTOU race under `t.Parallel()`: two tests can be handed
+the same "free" port before either actually claims it, since nothing holds
+it open in between. Fixed by replacing the OS-asks approach with a
+monotonic counter (`20000 + atomic.Int32`) — these tests only need a port
+unique *within this test run*, not one verified free by the OS at an
+instant in time, so guaranteeing uniqueness outright is both simpler and
+correct where the "ask and hope" approach wasn't. Reran `-race -count=3`
+clean afterward.
+
+Added tests beyond the plan's list to close real coverage gaps rather than
+stopping at "green": config-override branches in `New`, all four
+`failClassFromString` branches, `ListByTag`'s purge-on-list and
+Running/IP-inclusion paths, and a plain-`http://` forwarding test
+(`handleForward`) alongside the CONNECT one, since a `probeURL` override
+could use either scheme. Landed at 91.1% coverage; the remainder is
+OS-failure branches (bind errors, hijack failures) not worth simulating for
+a prototype.
+
+The `TestProvider_realProxyTunnelsConnect` test is the one that actually
+matters most here: it opens real sockets end to end — mock `Create` →
+`Get` past `provisionDelay` → real `http.Client` with
+`Transport.Proxy` dialing through the mock's CONNECT tunnel to a real
+`httptest.NewTLSServer` — and gets a real `204` back. That's the concrete
+proof the "mock runs a real proxy" decision actually delivers a genuine
+end-to-end healthcheck, not a simulated one.
+
+`internal/provider/mock` at 91.1% coverage. `make test` green across the
+whole repo.
+
+## Step 3 (revised) — Kubernetes pod provider replaces the mock
+
+After the mock provider above was built and working, the user pushed back:
+it felt too far from the real system to build confidence in, and they'd
+rather have simpler, more "real" code than a fast-but-simulated test
+double — a `kind`-based verification pass "once in a while" is an
+acceptable trade. They proposed replacing it outright with a provider that
+creates real Pods in the operator's own cluster, rather than keeping mock
+around as a fallback.
+
+**Talked through the trade-off before agreeing to it, since it wasn't free
+of downsides.** Pods sharing a cluster's egress IPs don't solve what this
+operator actually exists for (routing around IP-based rate limiting needs
+genuinely distinct egress paths — that's still only `gcp`), and `envtest`
+has no kubelet, so a Pod-based provider can never be exercised by the fast
+test suite either. Net effect: this is a replacement for the mock's role
+in local dev/CI confidence-building, not a new alternative to GCP, and the
+reconciler's own state-machine tests (Step 4) still need a minimal
+in-test stub `Provider` — a handful of lines in the test file, not a
+package with its own config format or fault-injection surface, which is
+the specific kind of complexity the user was pushing back on.
+
+**Picked the proxy software by actually checking what's out there,** not
+by guessing a Docker Hub path:
+
+```bash
+curl -s "https://hub.docker.com/v2/repositories/vimagick/tinyproxy/" | head -c 400
+# last_updated 2021-07-22 — stale
+curl -s "https://hub.docker.com/v2/repositories/ubuntu/squid/" | head -c 400
+# last_updated 2026-08-07T04:36:14Z — updated the same day, Canonical-published, 50M+ pulls
+```
+
+`ubuntu/squid` won clearly: actively maintained (rebuilt the same day this
+check ran), official publisher, and — since it's a public image — `kind`
+nodes pull it directly, no build/load step needed for the quickstart.
+Pinned to `6.6-24.04_edge` (Ubuntu 24.04 LTS base) rather than floating
+`latest`, for reproducibility.
+
+**Design, in `internal/provider/kubernetes/`:**
+
+- **`pod.go`** — `buildPod` is a pure function (mirrors the GCP provider's
+  planned `buildInsertRequest`): builds a `corev1.Pod` with one Squid
+  container. Config is generated in Go and passed via a `SQUID_CONF` env
+  var that the container's command writes to `/etc/squid/squid.conf`
+  before `exec squid` — deliberately not a separate `ConfigMap`, so
+  there's still exactly one Kubernetes object per proxy instance to
+  create, track, and clean up. The config itself is intentionally
+  permissive (`http_access allow all`, `via off`, `forwarded_for off`) —
+  documented in-code as a prototype-for-a-private-cluster choice, the same
+  posture the spec already takes toward cloud-init on the GCP provider
+  (installing/configuring proxy software is explicitly out of scope
+  there; this provider doesn't try to do more).
+- **`kubernetes.go`** — `Create`/`Get`/`Delete`/`ListByTag` against a
+  `client.Client`. **`providerID` is `<namespace>/<podName>`**, parsed
+  with `k8s.io/client-go/tools/cache.SplitMetaNamespaceKey` — the exact
+  same reasoning as the GCP provider's planned zone-qualified providerID
+  (Step 8): `Get`/`Delete` need to be self-contained without re-deriving
+  where the resource lives. State mapping collapses `Succeeded`/`Failed`/
+  `Unknown` all into `Terminated`, since the reconciler already treats
+  Stopped and Terminated identically (delete + recreate) — no finer
+  distinction would change any behavior. `Running` with no `PodIP` yet
+  maps to `Provisioning`, not `Running`, so an empty IP is never
+  published — the same rule the plan already called out for GCP's
+  `RUNNING`-without-`NatIP` case.
+- **Client construction is the one genuinely new pattern this provider
+  needed** that GCP/mock didn't: it builds its own `client.Client` via
+  `ctrl.GetConfig()`, which auto-detects in-cluster config when running as
+  a Pod and falls back to the local kubeconfig otherwise. That's what
+  makes `make run` against a local `kind` cluster and running in-cluster
+  use the exact same code path with zero provider-specific wiring in
+  `cmd/main.go`. The corresponding risk: `New()` must never run under
+  `go test` — it would happily connect to whatever real cluster the
+  developer's kubeconfig points at. Solved the same way `mock.Provider`
+  solved clock injection: an unexported `newWithClient(c, cfg)` constructor
+  that tests call directly, bypassing `ctrl.GetConfig()` entirely.
+  `New()` sits at 0% test coverage, deliberately — it's the one function
+  that must stay untested by design.
+- **RBAC implication worth flagging now** (implemented in Step 10):
+  `ListByTag` lists Pods across every namespace, not just the namespace(s)
+  Proxies live in, because orphan GC needs to find every Pod this operator
+  tagged regardless of where it landed. That means the operator's Pod
+  permissions have to be a `ClusterRole`, not scoped to a single
+  namespace — a real trade-off against the "fleet lives in one namespace,
+  keeps RBAC simple" principle the spec states for the CRD itself.
+  Documented rather than special-cased away.
+- **One known simplification, documented in a code comment rather than
+  solved:** Kubernetes surfaces both RBAC-denied and quota-exceeded as the
+  same 403 Forbidden, and `apierrors` has no helper to tell them apart.
+  Both classify as `ErrPermanent` — the safer of the two defaults (stop
+  retrying rather than hammering an API server that will never allow the
+  request), but a real ResourceQuota failure that would clear once other
+  proxies are deleted won't get the 5-minute-backoff-and-retry treatment
+  `ErrQuotaExceeded` gives on the GCP path.
+
+**Testing:** unlike the mock, this package's tests use
+`sigs.k8s.io/controller-runtime/pkg/client/fake` — real `corev1.Pod`
+objects, the real `client.Client` interface, not a hand-rolled in-memory
+map. That's a strictly more realistic test double than what mock.Provider
+was, while still being fast (no cluster, no kubelet) — it just can't prove
+a container actually starts and serves traffic, which is exactly the gap
+the `kind`-based verification pass is for. 77.6% coverage; the only
+meaningfully uncovered function is `New()` itself, deliberately.
+
+`make test` green across the whole repo (`go build`/`go vet` clean,
+`internal/provider` 96.0%, `internal/provider/kubernetes` 77.6%,
+`internal/provider/registry` 100%, unchanged).
+
+## Cleanup — removed unused cert-manager/webhook scaffolding
+
+Not a plan step; the user asked for this directly after I explained what
+`make test-e2e` currently does, and didn't want unused scaffold machinery
+carried forward into later work.
+
+kubebuilder's generic scaffold assumes a project *might* grow admission
+webhooks later, so it wires up webhook TLS-cert machinery and an
+unconditional cert-manager install in the e2e suite defensively. Checked
+whether any of it was actually load-bearing before touching anything:
+
+```bash
+grep -rn "cert-manager\|certmanager\|CertManager" config/
+# only inside commented-out [CERTMANAGER] blocks in kustomization.yaml —
+# the whole block is inert, never uncommented
+grep -n "webhook" PROJECT
+# no output — kubebuilder create webhook was never run
+```
+
+Confirmed nothing here does anything for this project — no `config/webhook/`
+exists, no `+kubebuilder:webhook` markers exist anywhere, and the spec's
+own non-goals explicitly rule out admission webhooks and cert-manager
+wiring forever, not just "not yet."
+
+Removed:
+
+- **`cmd/main.go`**: the `webhook` import, the three `webhook-cert-*`
+  flags, the `webhookServerOptions`/`webhookServer` construction, and the
+  `WebhookServer:` field on `ctrl.Options` — the manager runs with no
+  webhook server at all now, which is correct since nothing registers one.
+  Left the metrics-cert flags alone (`--metrics-cert-path` etc.) — those
+  let real certs be mounted for the metrics endpoint without cert-manager,
+  which is unrelated to webhooks and still useful. Reworded a comment that
+  said "TODO(user): If you enable certManager..." since that will never
+  happen here.
+- **`test/e2e/e2e_suite_test.go`**: the unconditional cert-manager install
+  in `BeforeSuite` and matching uninstall in `AfterSuite`
+  (`setupCertManager`/`teardownCertManager`/`shouldCleanupCertManager`),
+  and the doc comment claiming the suite "requires Kind and CertManager"
+  (it only requires Kind now).
+- **`test/utils/utils.go`**: `InstallCertManager`, `UninstallCertManager`,
+  `IsCertManagerCRDsInstalled`, and their now-unused `warnError` helper and
+  `certmanagerVersion`/`certmanagerURLTmpl` constants. Also removed
+  `UncommentCode` — grepped first and confirmed it had zero callers even
+  before this cleanup; it was dead scaffold code from the start, unrelated
+  to cert-manager, just found while in there.
+
+Left the inert commented-out `[WEBHOOK]`/`[CERTMANAGER]` blocks in the
+`config/*/kustomization.yaml` files and the
+`+kubebuilder:scaffold:e2e-webhooks-checks`-style marker comments in
+`test/e2e/e2e_test.go` alone — those are standard kubebuilder codegen
+anchors and pure comments with no runtime behavior, unlike the cert-manager
+install this cleanup actually removed. Stripping every trace of "webhook"
+from every scaffold comment across the tree would be a much bigger, purely
+cosmetic diff for no behavioral benefit; this cleanup targeted the things
+that were actually *doing* something.
+
+Verified with both build tags, since `test/e2e` only compiles under `-tags=e2e`:
+
+```bash
+go build ./... && go vet ./...
+go build -tags=e2e ./... && go vet -tags=e2e ./...
+```
+
+Both clean. `make test` green across the whole repo, unchanged from before
+the cleanup.
+
+## Cleanup — lean-down audit of Steps 0–3
+
+Planned and approved separately in
+[docs/plans/2026-08-08-1335-lean-scaffold-cleanup.md](../plans/2026-08-08-1335-lean-scaffold-cleanup.md).
+Prompted by the user asking (a) why webhook machinery existed at all when the
+spec's §12 says "do NOT build: admission webhooks, cert-manager wiring", and
+(b) for a full audit of completed work so the project starts as lean as
+possible.
+
+**Why the webhook machinery existed — for the record.** `kubebuilder init`
+emits it unconditionally: the active webhook-server wiring in `cmd/main.go`,
+cert-manager install in the e2e utils, and commented kustomize anchor blocks
+all arrive with `init`, not with `create webhook` (never run here). At Step 0
+the scaffold was deliberately committed untouched as a reviewable baseline
+(only `.github/` stripped), and spec §3's "config/ (scaffold-generated, kept
+working)" was read as license to keep the rest. The process gap: §12's
+non-goals deserved a pruning pass immediately *after* the baseline commit,
+especially for the parts that actually did something. The user caught it, not
+the build process.
+
+**Could `init` have skipped it?** No — verified against the v4.15.0 binary,
+not from memory:
+
+```bash
+kubebuilder init --help
+# flags: --domain --repo --owner --license(-file) --multigroup --namespaced
+#        --fetch-deps --skip-go-version-check --project-version --plugins
+# nothing subtracts features; optional plugins (helm, grafana, deploy-image,
+# autoupdate) are all additive — there is no "minimal" plugin
+```
+
+Scaffold-then-prune is the only supported path to a lean baseline. Worth
+knowing at the *next* project bootstrap: plan the pruning pass as part of
+scaffolding, not as a later discovery. (`--namespaced` was the one
+arguably-applicable flag, but it conflicts with the kubernetes-pod provider's
+cluster-wide `ListByTag` for orphan GC — cluster-scoped was correct.)
+
+**Audit result for the Go code: clean.** Nothing beyond spec that isn't a
+justified, already-logged deviation (`Instance.UID`/`CreatedAt`,
+`MaxLeases *int32`, `HealthCheck default={}`, registry-as-parameter,
+kubernetes provider per user decision). Trivial extras (`shortName=px`,
+`MaxProperties=32`) stay.
+
+**Scope lines drawn by the user during plan review** — recorded because they
+shape what "lean" means for this repo going forward:
+
+- Developer tooling is exempt: `.golangci.yml`, `.custom-gcl.yml`,
+  `.devcontainer/`, `AGENTS.md`, Makefile `lint`/`docker-buildx`/
+  `build-installer` targets all stay ("tooling around the project is cool, i
+  just want the application code produced to start as lean as possible").
+- Monitoring manifests stay: all of `config/prometheus/`, plus the paired
+  metrics-TLS-via-cert-manager plumbing
+  (`config/default/cert_metrics_manager_patch.yaml` and the metrics-certs/
+  ServiceMonitor halves of the commented replacements block) — removing half
+  of a pair would leave dangling comment references.
+- All RBAC manifests stay, including the `proxy_admin/editor/viewer` helper
+  ClusterRoles whose own headers say "not used by the project itself".
+- Network policies go: "we do not need any network policies at the moment".
+
+**Removed:**
+
+- `config/network-policy/` (kustomization.yaml, allow-metrics-traffic.yaml)
+  plus its commented `#- ../network-policy` line in the default kustomization.
+- Webhook-only remnants in `config/default/kustomization.yaml`: the commented
+  `#- ../webhook` / `#- ../certmanager` resource lines, the
+  `manager_webhook_patch.yaml` patch reference, and the webhook halves of the
+  replacements block (serving-cert → Validating/Mutating WebhookConfiguration
+  cainjection, conversion webhook, and the
+  `+kubebuilder:scaffold:crdkustomizecainjection*` markers — anchors only for
+  `kubebuilder create webhook`, permanently a non-goal).
+- The two commented `[WEBHOOK]` blocks in `config/crd/kustomization.yaml`
+  (conversion patches + the `configurations:` reference), along with the empty
+  `patches:` key they lived under and the `crdkustomizewebhookpatch` marker.
+  Kept the one-line `crdkustomizeresource` marker — `kubebuilder create api`
+  could legitimately run again.
+- `config/crd/kustomizeconfig.yaml` — only consumer was the removed
+  `configurations:` block.
+
+Verified: `bin/kustomize build config/default` and `... config/crd` both
+render cleanly (no dangling references), `go build`/`go vet` clean with and
+without `-tags=e2e`, `make test` green with coverage numbers identical to
+pre-cleanup.
+
+## Step 4 — Reconciler (`internal/controller/`)
+
+Implemented the state machine per the plan's action table:
+`proxy_controller.go` (dispatch + managed/external/delete paths, cloud-init
+resolution, spec-hash annotation persistence, Secret→Proxy watch mapping),
+`status.go` (condition reasons, `computePhase`, the single deferred
+`patchStatusIfChanged`), and `spechash.go` (explicit
+`{placement, resolved cloud-init, port}` hash input, SHA-256 hex). Tests:
+the action-table suite against a fake client with an in-test `stubProvider`
+(`reconcile_test.go`), `computePhase` truth table, spec-hash
+stability/normalization/sensitivity tables, and a rewritten envtest suite
+(`proxy_controller_test.go`) driving full lifecycles — provision→Running,
+spec-change replacement, finalizer deletion, External tracking — against
+the real apiserver with real CRD defaulting.
+
+**Deviation from the plan's `Requeue: true` rows:** `ctrl.Result{Requeue}`
+is deprecated in controller-runtime v0.24 (verified in the vendored source,
+`pkg/reconcile/reconcile.go`: "Deprecated: Use `RequeueAfter` instead"), and
+golangci's staticcheck would flag it. Those rows use a fifth configurable
+interval instead, `RequeueNow` (default 1s) — same "process the next state
+promptly" semantics, still shrinkable in tests like the other four.
+
+**A real bug the new tests caught on their first run** (both the fake-client
+and envtest suites, independently): in the replacement path's
+instance-is-gone branch, the status clear (`ProviderID = ""`) was staged
+*before* `setSpecHash`'s metadata `Update` — and `client.Update` refreshes
+the whole object from the server's response, *including status*, so the
+staged clear was silently overwritten and the proxy wedged with a stale
+providerID. Fix: stage status changes only after any metadata Update
+(the create branch already did it in that order). Worth remembering for
+every future reconciler: **`r.Update` clobbers in-memory status staged
+before it.**
+
+Two judgment calls the plan left open, now documented in code:
+
+- `computePhase` maps Provisioned=True with no Healthy verdict yet to
+  `Provisioning`, not `Ready` — a proxy nobody has probed shouldn't be
+  advertised as Ready. Health (Step 5) flips it.
+- `deletionFailure` (the finalizer path's error handler) never latches
+  `ErrPermanent` the way `providerFailure` does — latching there would
+  wedge the object forever with no retry; it keeps retrying visibly
+  instead.
+
+The permanent-failure latch compares the condition's `observedGeneration`
+against the CR generation, so a spec edit automatically clears Failed and
+retries — no manual annotation-poking needed to recover.
+
+Verification:
+
+```bash
+make test    # regenerates manifests (role.yaml gains secrets get;list;watch), envtest green
+KUBEBUILDER_ASSETS="$PWD/bin/k8s/1.36.2-darwin-arm64" go test -race ./internal/controller/
+go test -short ./internal/controller/   # 0.6s — envtest suite correctly skipped
+go build -tags=e2e ./... && go vet -tags=e2e ./...
+```
+
+`internal/controller` at 75.9% coverage; the envtest suite runs in ~6s and
+is now guarded by `testing.Short()` per the testing conventions.
+
+Worth noting: the envtest specs simulate instance state by mutating the
+stub between direct `Reconcile` calls rather than running the manager —
+deterministic and fast, at the cost of not exercising watch-driven
+requeues; Step 11's manager-driven cases cover that. The Secret watch is
+wired in `SetupWithManager` but the label-restricted Secret cache it
+assumes arrives with `cmd/main.go` in Step 10.
+
+## Step 5 — Health engine (`internal/health/`)
+
+Implemented the engine per the plan's design: `probe.go` (through-the-proxy
+probe with the plan's exact transport — fresh per probe,
+`DisableKeepAlives: true` so every probe re-exercises CONNECT) and
+`engine.go` (leader-elected manager Runnable: 1 s scheduler tick + a pool
+of 8 workers, per-proxy threshold state under one mutex, transition-only
+emission over a buffered `chan event.GenericEvent`). The reconciler side
+landed in the same step: a `HealthSnapshotter` interface + `applyHealth`
+staging the Healthy condition/latency/lastHealthCheckTime from
+`Engine.Snapshot`, and a conditional
+`WatchesRawSource(source.Channel(...))` in `SetupWithManager`. Everything
+tolerates nil (engine unwired) until `cmd/main.go` connects the two in
+Step 10.
+
+Deviations and judgment calls beyond the plan text:
+
+- **First-probe scheduling is split by whether a verdict was seeded.** The
+  plan's startup jitter (`nextDue = now + rand(0, interval)`) applies only
+  to proxies whose state was seeded from an existing Healthy condition —
+  the restart case it exists for. A never-probed proxy is probed on the
+  next tick instead; making a brand-new proxy wait up to a full interval
+  for its first verdict would be pure lag with no thundering-herd benefit.
+- **The latency-change emission rule only applies while the verdict is
+  healthy.** Caught by the first test run, not foreseen: a success streak
+  still below `successThreshold` (verdict unhealthy, reported unhealthy)
+  satisfied the plan's rule (c) — latency delta vs a stale reported value,
+  rate window open — and emitted a pointless latency-only update for a
+  proxy still reported as unhealthy. Guarded with `res.ok && *st.healthy`.
+- **`ProbeTLSConfig` field added to the engine** (nil = system roots). The
+  probe function needs a CA override to be testable against
+  `httptest.NewTLSServer`, and the same knob is genuinely useful for
+  probing targets signed by a private CA. Not a test-only backdoor.
+- **State pruning doubles as replacement hygiene:** any proxy with no
+  probeable host (provisioning, mid-replacement, deleting) has its state
+  dropped each tick, so a replacement instance always starts with fresh
+  counters. Complementarily, the reconciler's create branch removes the
+  stale Healthy condition and latency fields — a new VM shouldn't wear its
+  predecessor's verdict.
+
+Tests: a real CONNECT-capable proxy stub (hijack + bidirectional
+`io.Copy`) probing a real `httptest.NewTLSServer` — CONNECT success,
+refused CONNECT, unexpected status, dead proxy, plain-http forwarding;
+table-driven threshold/suppression/seeding/pruning tests driving
+`record`/`tick` directly; an end-to-end `Start` test (fake reader, fake
+probeFn, 5 ms tick) asserting event delivery, snapshot content, and clean
+shutdown on context cancel; and controller-side tests with a
+`fakeSnapshotter` proving Running+healthy ⇒ `Ready`, Running+unhealthy ⇒
+`Unhealthy`, no-verdict ⇒ no condition, and stale-verdict cleanup on
+replacement.
+
+Verification (all green):
+
+```bash
+make test                          # envtest + units; health 93.4%, controller 77.4%
+KUBEBUILDER_ASSETS="$PWD/bin/k8s/1.36.2-darwin-arm64" go test -race ./...
+go test -race -count=2 ./internal/health/   # shook out the emission-rule bug above
+```
+
+Worth noting: `docs/architecture.md` (created between Steps 4 and 5 on
+user request) gained a §6 for the engine and now shows the third workqueue
+feed (`source.Channel`). The `Healthy` condition reasons live in the
+controller package (`ReasonProbeSucceeded`/`ReasonProbeFailed`) — the
+engine deliberately knows nothing about conditions except reading one at
+seed time, keeping the state/representation split honest. The
+`hint`-driven `wg.Go` idiom (Go 1.25+) replaced the classic
+`wg.Add/defer wg.Done` in the worker pool.

docs/plans/2026-08-07-1747-proxy-operator.md

@@ -22,7 +22,7 @@ spec change deletes and recreates the VM. No in-place update logic.
 | API group | `crawl.example.com`, `v1alpha1`, kind `Proxy`, **namespaced** |
 | Git flow | Scaffold commit, then work on `feat/proxy-operator`, MR via `tea`, no merge/delete from CLI |
 | kubebuilder | `go install sigs.k8s.io/kubebuilder/v4/cmd/kubebuilder@v4.15.0` |
-| Mock health | Mock provider runs a **real in-process HTTP CONNECT proxy** per instance, so healthchecks genuinely pass and the kind demo is truly end-to-end |
+| Local/CI provider | **Kubernetes pod provider**, not an in-memory mock: creates real `ubuntu/squid` pods in-cluster. Revised mid-build — see Step 3 |
 | Verification | vet + unit + envtest, then a throwaway kind cluster running the README quickstart, then delete it |
 
 ### Verified environment — no version substitutions needed
@@ -38,7 +38,7 @@ omitting the substitutions section.
 
 ### Milestone order — each ends green on `go build ./... && go vet ./...`
 
-1. Scaffold + pins → 2. `api/v1alpha1` + CEL → 3. `internal/provider` + mock →
+1. Scaffold + pins → 2. `api/v1alpha1` + CEL → 3. `internal/provider` + kubernetes-pod →
 4. reconciler + envtest → 5. health engine → 6. lease + discovery → 7. GCP provider →
 8. orphan GC + metrics → 9. `cmd/main.go` wiring + `config/` → 10. docs + kind run.
 
@@ -64,8 +64,9 @@ plan to `docs/plans/2026-08-07-1747-proxy-operator.md` per CLAUDE.md. **Commit t
 untouched scaffold on its own** so every later diff is reviewable.
 
 Post-scaffold hand-edits: `CONTROLLER_TOOLS_VERSION ?= v0.21.0` in the Makefile (CEL
-emission at the 1.36 API level); add a `run-mock` target; delete the scaffolded
-`.github/workflows/` (the remote is Gitea).
+emission at the 1.36 API level); add a `run-dev` target wired to a sample
+`--providers-config` (Step 10); delete the scaffolded `.github/workflows/` (the
+remote is Gitea).
 
 ---
 
@@ -120,12 +121,15 @@ health, discovery, and the hash.
 ```
 internal/provider/{provider,errors,name,config,metrics}.go
 internal/provider/registry/registry.go   # type→constructor — SEPARATE package
-internal/provider/{mock,gcp}/
+internal/provider/{kubernetes,gcp}/
 ```
 
 **Import-cycle trap:** a registry inside `internal/provider` would have to import
-`internal/provider/mock`, which imports `internal/provider`. `init()` self-registration
-is banned by CLAUDE.md, so the registry goes in its own leaf-importing package.
+`internal/provider/kubernetes` (or `.../gcp`), both of which import `internal/provider`
+for the interface. `init()` self-registration is banned by CLAUDE.md, so the registry
+goes in its own leaf-importing package, and its `Build` function takes the
+type→constructor map as a parameter instead — see Step 2's execution log entry for why
+this ended up better than a package-level map even beyond avoiding the cycle.
 
 `Instance` needs **two fields the spec omits**, or orphan GC is unimplementable:
 `UID string` (from the label, for the liveness match) and `CreatedAt time.Time` (for
@@ -157,23 +161,67 @@ same 80 bits. 80 bits → birthday collision at ~2^40 objects against a fleet of
 
 ---
 
-## Step 3 — Mock provider (`internal/provider/mock/`)
+## Step 3 — Kubernetes pod provider (`internal/provider/kubernetes/`)
 
-**State is a pure function of an injectable clock — no background timers.** `Get`/
-`ListByTag` derive state from `createdAt`/`deletedAt` vs `now()`:
-`< provisionDelay` → Provisioning; else Running; `deletedAt` set and `< deleteDelay` →
-Terminated; beyond that → purged, `ErrNotFound`. Deterministic under a fake clock,
-correct under the real one, and no goroutine lifecycle to leak.
+**Revised after Step 3 was first built as an in-memory mock provider** (state-machine
+simulation + a hand-rolled CONNECT proxy on a shared, refcounted local listener). The
+user found that too far from the real system to build confidence in, and didn't need
+tests to be fast enough to justify the complexity it cost — a real `kind`-cluster
+verification pass "once in a while" is an acceptable trade for tests that actually
+look like the final product. Full narrative of the reversal is in
+`docs/plans-executions/2026-08-07-1747-proxy-operator.md`; this section describes the
+replacement, which is what actually gets built for local dev/CI going forward. No
+in-memory provider remains in the tree — GCP is now the only other provider, per the
+spec's original two-provider scope.
 
-**Real proxy listener (the user's decision):** when a record first reports `Running`,
-lazily start an `http.Server` on `127.0.0.1:0` implementing HTTP `CONNECT` tunnelling
-(hijack + bidirectional `io.Copy`) plus plain-HTTP forwarding, and report `127.0.0.1`
-plus the real listener port. `Delete` shuts it down. This is what makes the health
-engine's probe a genuine CONNECT through a real proxy, so the kind quickstart actually
-reaches Ready and leasable. One `http.Server` per instance, bounded by fleet size.
+**What it does:** `Create` creates a `corev1.Pod` running a proxy container in the
+same cluster (and same namespace as the owning Proxy CR — `req.Namespace`); `Get`
+reads the Pod's phase/IP; `Delete` deletes it (tolerating NotFound); `ListByTag` lists
+Pods by the standard `LabelManaged`/`LabelUID` labels, unscoped by namespace (the
+operator's RBAC needs cluster-scoped Pod permissions — see RBAC note below).
 
-Fault injection: config-driven `failNextCreates`/`failWith` for the demo, plus
-`InjectCreateFailures(n int, class error)` for tests. `Create` is idempotent by name.
+**Proxy software: `ubuntu/squid`** (Canonical's actively maintained LTS image on
+Docker Hub, verified before picking it — 50M+ pulls, updated the same day this
+decision was made), not a hand-rolled proxy. It's a public image, so `kind` nodes
+pull it directly; no build/load step needed for the quickstart. Squid's config
+(`http_port <req.Port>`, permissive ACL) is generated in Go and injected via an env
+var the container's command writes to `/etc/squid/squid.conf` before exec'ing squid —
+no separate ConfigMap object, so there's still only one Kubernetes object per proxy
+instance to create, track, and clean up.
+
+**providerID format: `<namespace>/<podName>`** (parseable with
+`k8s.io/client-go/tools/cache.SplitMetaNamespaceKey`), so `Get`/`Delete` are
+self-contained without needing to re-derive the namespace — the same reasoning as the
+GCP provider's zone-qualified providerID in Step 8.
+
+**Pod naming:** reuses `provider.NameFromUID` unchanged — the same deterministic name
+satisfies Kubernetes Pod naming rules (`^[a-z0-9]([-a-z0-9]*[a-z0-9])?$`, ≤253 chars)
+with room to spare.
+
+**State mapping:** Pod phase `Pending`, or `Running` with no PodIP yet → Provisioning
+(never publish an empty IP); `Running` with a PodIP → Running; `Succeeded`/`Failed`/
+`Unknown` → Terminated (the reconciler treats Stopped and Terminated identically —
+delete and recreate, cattle not pets — so collapsing three failure-ish phases into one
+is enough).
+
+**Client:** built internally via `ctrl.GetConfig()` (auto-detects in-cluster config,
+falls back to the local kubeconfig otherwise), not threaded through the registry
+`Constructor` signature — this is what makes `make run` against a local `kind`
+cluster and running in-cluster use the exact same code path with no provider-specific
+wiring in `cmd/main.go`.
+
+**Testing, given envtest can't schedule real Pods** (no kubelet — a Pod created
+against `envtest`'s API server just sits `Pending` forever): `internal/provider/kubernetes`
+itself is unit-tested against `sigs.k8s.io/controller-runtime/pkg/client/fake` — real
+Pod objects, real client interface, fully exercises Create/Get/Delete/ListByTag
+logic and the Pod-construction function in isolation, just without a kubelet actually
+starting a container. Real end-to-end proof (does a probe actually tunnel through a
+real Squid pod) only happens against a real `kind` cluster, in the Verification
+section — which is exactly what the user asked for. Step 4's reconciler tests use a
+small `Provider`-interface stub defined directly in the controller test file (a
+handful of lines, not a package) for exercising the state-machine's branching logic —
+categorically simpler than what mock.Provider was, since it has no config format, no
+fault-injection surface, and exists only inside test code.
 
 ---
 
@@ -425,14 +473,17 @@ registry → manager → `mgr.Add` health engine, GC, lease expiry loop, discove
 `SetupWithManager`. Contexts from `ctrl.SetupSignalHandler()` throughout.
 
 RBAC markers: proxies CRUD + status + finalizers, secrets get/list/watch, events
-create/patch. `config/`: providers ConfigMap mount, `DISCOVERY_TOKEN` from a Secret,
-containerPort 8090 + Service. Samples: `proxy_mock.yaml`, `proxy_gcp.yaml`,
-`proxy_external.yaml`, `providers-config.yaml`.
+create/patch, and (for the kubernetes-pod provider) pods get/list/watch/create/delete
+— cluster-scoped, since `ListByTag` enumerates across namespaces. `config/`: providers
+ConfigMap mount, `DISCOVERY_TOKEN` from a Secret, containerPort 8090 + Service.
+Samples: `proxy_kubernetes.yaml`, `proxy_gcp.yaml`, `proxy_external.yaml`,
+`providers-config.yaml`.
 
 `docs/architecture.md`: components table, ASCII data-flow diagram, and a **Decisions**
 section covering the channel-vs-patch choice, replacement-polls-to-NotFound, base32
-naming, discovery without leader election, single-mutex lease store, mock-runs-a-real-
-proxy, leader-handover health seeding, the latency-suppression refinement, the
+naming, discovery without leader election, single-mutex lease store, the mock→
+kubernetes-pod-provider revision (why, and why `ubuntu/squid` over a hand-rolled
+proxy), leader-handover health seeding, the latency-suppression refinement, the
 `lastHealthCheckTime` semantics, and the logr-not-slog deviation (CLAUDE.md says
 `slog`, but `log.FromContext(ctx)` returns logr inside controller paths — noted, not
 silently ignored).
@@ -448,16 +499,17 @@ note confirming no substitutions were needed. Then a `CHANGELOG.md` entry with a
 
 ## Step 11 — Tests
 
-**envtest** (`internal/controller/`), mock provider + a fake `HealthSnapshotter`,
-intervals shrunk to 50–200 ms, whole suite behind `testing.Short()`:
-Managed→Ready; spec change → old mock instance gone and providerID changed; delete →
-finalizer runs and instance removed; External → Ready on first health pass, no
-finalizer; injected quota → `Provisioned=False/QuotaExceeded` and phase *not* Failed;
-permanent error → Failed and no further provider calls; adopt (strip annotation →
-restored, providerID unchanged); and the **CEL cases only a real API server can test** —
-mode/provider mutation rejected, Managed-without-provider, External-without-endpoint,
-cloudInit both/neither, and `healthCheck` omitted → nested defaults materialized (the
-`default={}` assertion).
+**envtest** (`internal/controller/`), a small in-test stub `Provider` (not the real
+kubernetes-pod provider — envtest has no kubelet, so a real Pod never leaves Pending)
+plus a fake `HealthSnapshotter`, intervals shrunk to 50–200 ms, whole suite behind
+`testing.Short()`: Managed→Ready; spec change → old stub instance gone and
+providerID changed; delete → finalizer runs and instance removed; External → Ready
+on first health pass, no finalizer; injected quota → `Provisioned=False/QuotaExceeded`
+and phase *not* Failed; permanent error → Failed and no further provider calls; adopt
+(strip annotation → restored, providerID unchanged); and the **CEL cases only a real
+API server can test** — mode/provider mutation rejected, Managed-without-provider,
+External-without-endpoint, cloudInit both/neither, and `healthCheck` omitted → nested
+defaults materialized (the `default={}` assertion).
 
 **Action-table unit tests** — the highest-value tests in the repo: `fake` client with
 `WithStatusSubresource`, calling `Reconcile` directly, table-driven over every row of
@@ -466,12 +518,15 @@ client runs neither CEL nor defaulting — that's what the envtest CEL cases cov
 
 **Units:** name derivation (idempotency, `^proxy-[a-z2-7]{16}$`, 10k-UID distinctness);
 `Class()` mapping + `errors.Is`/`errors.As` through the multi-unwrap; config loading;
-mock state at the delay boundary with a fake clock; `buildInsertRequest` field-by-field
-+ GCP error classification + RUNNING-without-IP; `computePhase` truth table; `SpecHash`
-stability *and* sensitivity; lease store (capacity, `MaxLeases=0`, least-loaded with
-latency tie-break, cooldown with/without target, report on an expired-but-retained
-lease, concurrent acquire under `-race` never exceeding `MaxLeases`); discovery
-handlers over `httptest` + fake reader + real store; health thresholds against a real
+kubernetes-pod provider Create/Get/Delete/ListByTag against
+`sigs.k8s.io/controller-runtime/pkg/client/fake` (real Pod objects, real client
+interface, no kubelet needed for this level) plus pure tests of the generated Squid
+config and Pod spec; `buildInsertRequest` field-by-field + GCP error classification +
+RUNNING-without-IP; `computePhase` truth table; `SpecHash` stability *and*
+sensitivity; lease store (capacity, `MaxLeases=0`, least-loaded with latency
+tie-break, cooldown with/without target, report on an expired-but-retained lease,
+concurrent acquire under `-race` never exceeding `MaxLeases`); discovery handlers
+over `httptest` + fake reader + real store; health thresholds against a real
 CONNECT-capable `httptest` proxy stub.
 
 Everything runs with `-race`.
@@ -485,19 +540,20 @@ go vet ./... && make test && make build      # unit + envtest, -race
 
 kind create cluster --name proxy-operator-demo
 make install
-make run-mock &                              # --providers-config hack/providers-mock.yaml
-kubectl apply -f config/samples/proxy_mock.yaml
-kubectl get px -w                            # expect Ready with an IP
+make run-dev &                                # --providers-config hack/providers-dev.yaml
+kubectl apply -f config/samples/proxy_kubernetes.yaml
+kubectl get px -w                            # expect Ready with an IP (a real squid Pod)
 curl -s 'localhost:8090/v1/proxies?healthy=true' | jq
 curl -s -XPOST localhost:8090/v1/leases -d '{"selector":{"geo":"eu"},"ttlSeconds":300}' | jq
 curl -s -XPOST localhost:8090/v1/leases/<id>/report -d '{"result":"rate_limited","target":"example.com"}'
 curl -si -XDELETE localhost:8090/v1/leases/<id>   # 204, and 204 again
-kubectl delete -f config/samples/proxy_mock.yaml  # finalizer runs, object goes
+kubectl delete -f config/samples/proxy_kubernetes.yaml  # finalizer runs, Pod is deleted
 kind delete cluster --name proxy-operator-demo
 ```
 
 Success bar: a competent SRE clones the repo, follows the README, and holds a lease on a
-healthy mock proxy in under 10 minutes.
+healthy proxy — a real Squid pod running in their own `kind` cluster — in under 10
+minutes.
 
 Then commit on `feat/proxy-operator`, push with `-u`, open the MR with
 `tea pr create --base main --head feat/proxy-operator`, print the URL. No merging or

docs/plans/2026-08-08-1335-lean-scaffold-cleanup.md

@@ -0,0 +1,128 @@
+# Plan: Lean-down cleanup — strip non-goal scaffold from the application footprint
+**Created:** 2026-08-08 13:35
+
+## Context
+
+The user asked two things: (1) explain why webhook-related pieces existed at all when
+the spec ([docs/prompts/__initial-prompt.md](docs/prompts/__initial-prompt.md) §12)
+says "do NOT build: admission webhooks, cert-manager wiring", and (2) audit all
+completed work (Steps 0–3) for anything extra, so the project starts as lean as
+possible before Step 4 (reconciler) begins.
+
+**The answer to (1), already given in conversation and to be recorded in the
+execution log:** `kubebuilder init` unconditionally generates webhook machinery for
+every project. At Step 0 the scaffold was deliberately committed untouched as a
+reviewable baseline, with only `.github/` stripped; spec §3's "config/
+(scaffold-generated, kept working)" was read as license to keep the rest. That was a
+process gap — §12's non-goals deserved an active pruning pass immediately after the
+baseline commit, especially for parts that actually *did* something (main.go started
+a real webhook server; e2e installed cert-manager). The active parts were already
+removed in commit `7700358` after the user noticed; this plan removes what remains.
+
+**Could `init` have been told to skip it? No — verified against the v4.15.0 binary
+(`kubebuilder init --help`), not from memory.** Its full flag surface is
+domain/repo/owner/license/multigroup/namespaced/fetch-deps/skip-go-version-check/
+project-version/plugins; nothing subtracts features. Plugins are purely additive
+(helm, grafana, deploy-image, autoupdate — no "minimal" plugin), and while webhook
+*code* only appears via `create webhook` (never run here), the baseline *plumbing*
+(main.go webhook server, commented kustomize blocks, cert-manager in e2e utils,
+prometheus/network-policy dirs) is emitted unconditionally so later `create webhook`
+runs have anchors. Scaffold-then-prune is the only supported path to a lean
+baseline. (`--namespaced` was the one arguably-applicable flag, but it conflicts
+with the kubernetes-pod provider's cluster-wide `ListByTag` for orphan GC —
+cluster-scoped was correct.) Record this in the execution log so the next project
+bootstrap knows to plan a pruning pass at scaffold time.
+
+**Scope, per the user's explicit direction:** "tooling around the project is cool, i
+just want the application code produced to start as lean as possible." So developer
+tooling stays untouched — `.golangci.yml`, `.custom-gcl.yml`, `.devcontainer/`,
+`AGENTS.md`, Makefile `lint`/`docker-buildx`/`build-installer` targets, and
+`.claude/settings.json` are all explicitly KEPT. The cleanup targets only the
+application and its deployed footprint: `config/` manifests that `make deploy`
+would apply or that exist solely to serve never-to-be-built features.
+
+**Code-level audit result (part of this task's deliverable, no action needed):**
+Steps 1–3's Go code contains nothing beyond spec that isn't a justified,
+already-logged deviation (`Instance.UID`/`CreatedAt` for orphan GC, `MaxLeases
+*int32`, `HealthCheck default={}`, registry-as-parameter, kubernetes provider
+replacing mock per user decision). Trivial extras (`shortName=px`,
+`MaxProperties=32` on attributes) are harmless and stay. `metrics_auth_role*.yaml` /
+`metrics_reader_role.yaml` are genuinely used by the secure-metrics filter and the
+e2e metrics test — they stay.
+
+## Scope refinements from user review
+
+- **KEEP `config/prometheus/`** entirely (user: monitoring manifests stay),
+  including `monitor_tls_patch.yaml` and the commented `#- ../prometheus` enable
+  line in the default kustomization.
+- **KEEP the paired metrics-TLS plumbing** for coherence with the kept prometheus
+  TLS patch: `config/default/cert_metrics_manager_patch.yaml`, its commented
+  `[METRICS-WITH-CERTS]` reference, and the *metrics-certs/ServiceMonitor halves*
+  of the commented replacements block. Removing half of a pair would leave
+  dangling comment references — mess, not lean.
+- **REMOVE `config/network-policy/`** (user: "we do not need any network policies
+  at the moment").
+- **KEEP all RBAC manifests** (user: "i want to keep manifests relevant to
+  rbacs") — including the `proxy_admin/editor/viewer` helper ClusterRoles
+  originally slated for removal.
+
+## Removals (all in `config/`)
+
+1. **`config/network-policy/`** (2 files: kustomization.yaml,
+   allow-metrics-traffic.yaml) + the commented `#- ../network-policy` line and its
+   `[NETWORK POLICY]` banner in `config/default/kustomization.yaml`.
+
+2. **`config/default/kustomization.yaml`** — strip the *webhook-only* parts: the
+   commented `#- ../webhook` and `#- ../certmanager` resource lines with their
+   banners; the commented `manager_webhook_patch.yaml` patch reference; and the
+   webhook halves of the commented replacements block (`serving-cert` Certificate
+   sources targeting Validating/Mutating WebhookConfiguration cainjection, the
+   conversion-webhook block, and the
+   `+kubebuilder:scaffold:crdkustomizecainjectionns`/`...name` markers — anchors
+   only for `kubebuilder create webhook`, which will never run here). The
+   metrics-certs/ServiceMonitor replacement halves stay (see scope refinements).
+
+3. **`config/crd/kustomization.yaml`** — strip the two commented `[WEBHOOK]` blocks
+   (conversion-webhook patches and the `configurations:` reference) and the
+   `+kubebuilder:scaffold:crdkustomizewebhookpatch` marker. **Keep** the
+   `+kubebuilder:scaffold:crdkustomizeresource` marker (one line; anchors
+   `kubebuilder create api`, which could legitimately run again).
+
+4. **`config/crd/kustomizeconfig.yaml`** — teaches kustomize how to rewrite webhook
+   conversion service references; only consumer was the commented block in (3).
+
+`config/rbac/` is untouched: the operator's own role/bindings, the metrics-auth
+roles, *and* the `proxy_admin/editor/viewer` helper ClusterRoles all stay per the
+user's direction.
+
+## Execution steps
+
+1. Save this plan into the repo per CLAUDE.md: `docs/plans/$(date
+   "+%Y-%m-%d-%H%M")-lean-scaffold-cleanup.md`, committed on its own before the
+   cleanup work starts.
+2. Delete the files listed above (`git rm`); edit the two kustomization.yaml files.
+3. Verify:
+   - `bin/kustomize build config/default` renders cleanly (proves no dangling
+     references; kustomize is already in `bin/` from the scaffold).
+   - `bin/kustomize build config/crd` renders cleanly.
+   - `go build ./... && go vet ./...` and the `-tags=e2e` variants stay clean.
+   - `make test` stays green.
+4. Append an execution-log section to
+   [docs/plans-executions/2026-08-07-1747-proxy-operator.md](docs/plans-executions/2026-08-07-1747-proxy-operator.md)
+   covering: the "why webhooks existed" explanation (scaffold origin + the Step 0
+   process gap), the audit's clean bill for the Go code, the keep-tooling scope
+   decision, and the exact removals.
+5. Single commit on `feat/proxy-operator` with the plan-file commit preceding it.
+
+## Verification
+
+```bash
+bin/kustomize build config/default > /dev/null && echo default-ok
+bin/kustomize build config/crd > /dev/null && echo crd-ok
+go build ./... && go vet ./...
+go build -tags=e2e ./... && go vet -tags=e2e ./...
+make test
+```
+
+All must pass with output identical in substance to pre-cleanup (same tests, same
+coverage numbers).

go.mod

@@ -5,6 +5,7 @@ go 1.26.0
 require (
 	github.com/onsi/ginkgo/v2 v2.27.4
 	github.com/onsi/gomega v1.39.0
+	k8s.io/api v0.36.0
 	k8s.io/apimachinery v0.36.0
 	k8s.io/client-go v0.36.0
 	sigs.k8s.io/controller-runtime v0.24.1
@@ -85,7 +86,6 @@ require (
 	gopkg.in/evanphx/json-patch.v4 v4.13.0 // indirect
 	gopkg.in/inf.v0 v0.9.1 // indirect
 	gopkg.in/yaml.v3 v3.0.1 // indirect
-	k8s.io/api v0.36.0 // indirect
 	k8s.io/apiextensions-apiserver v0.36.0 // indirect
 	k8s.io/apiserver v0.36.0 // indirect
 	k8s.io/component-base v0.36.0 // indirect

internal/controller/health_test.go

@@ -0,0 +1,175 @@
+package controller
+
+import (
+	"strings"
+	"testing"
+	"time"
+
+	apimeta "k8s.io/apimachinery/pkg/api/meta"
+	metav1 "k8s.io/apimachinery/pkg/apis/meta/v1"
+	"k8s.io/apimachinery/pkg/types"
+
+	crawlv1alpha1 "gitea.home.hrajfrisbee.cz/kacerr/egress-proxies-operator/api/v1alpha1"
+	"gitea.home.hrajfrisbee.cz/kacerr/egress-proxies-operator/internal/health"
+	"gitea.home.hrajfrisbee.cz/kacerr/egress-proxies-operator/internal/provider"
+)
+
+type fakeSnapshotter struct {
+	snap health.Snapshot
+	ok   bool
+}
+
+func (f fakeSnapshotter) Snapshot(types.NamespacedName) (health.Snapshot, bool) {
+	return f.snap, f.ok
+}
+
+// TestReconcile_healthRepresentation covers the reconciler's half of the
+// health split: turning the engine's Snapshot into the Healthy condition,
+// the latency fields, and ultimately the Ready/Unhealthy phases.
+func TestReconcile_healthRepresentation(t *testing.T) {
+	t.Parallel()
+
+	probeTime := time.Now()
+	freshHash := specHash(managedProxy(), "")
+	runningStub := func() *stubProvider {
+		return &stubProvider{
+			getInst: &provider.Instance{ID: "stub-id-1", IP: "10.1.2.3", State: provider.StateRunning},
+		}
+	}
+
+	tests := []struct {
+		name      string
+		proxy     *crawlv1alpha1.Proxy
+		stub      *stubProvider
+		health    HealthSnapshotter
+		wantPhase crawlv1alpha1.ProxyPhase
+		verify    func(t *testing.T, r *ProxyReconciler)
+	}{
+		{
+			name:  "running and healthy becomes Ready",
+			proxy: managedProxy(withProviderID("stub-id-1"), withSpecHashAnnotation(freshHash)),
+			stub:  runningStub(),
+			health: fakeSnapshotter{ok: true, snap: health.Snapshot{
+				Healthy: true, Latency: 37 * time.Millisecond, LastProbe: probeTime,
+			}},
+			wantPhase: crawlv1alpha1.PhaseReady,
+			verify: func(t *testing.T, r *ProxyReconciler) {
+				p := getProxy(t, r)
+				assertCondition(t, p, crawlv1alpha1.ConditionHealthy, metav1.ConditionTrue, ReasonProbeSucceeded)
+				if p.Status.LatencyMillis != 37 {
+					t.Errorf("latencyMillis = %d, want 37", p.Status.LatencyMillis)
+				}
+				if p.Status.LastHealthCheckTime == nil {
+					t.Error("lastHealthCheckTime not set")
+				}
+			},
+		},
+		{
+			name:  "running but unhealthy becomes Unhealthy",
+			proxy: managedProxy(withProviderID("stub-id-1"), withSpecHashAnnotation(freshHash)),
+			stub:  runningStub(),
+			health: fakeSnapshotter{ok: true, snap: health.Snapshot{
+				Healthy: false, LastProbe: probeTime,
+				LastError: "CONNECT refused", ConsecutiveFailures: 3,
+			}},
+			wantPhase: crawlv1alpha1.PhaseUnhealthy,
+			verify: func(t *testing.T, r *ProxyReconciler) {
+				p := getProxy(t, r)
+				assertCondition(t, p, crawlv1alpha1.ConditionHealthy, metav1.ConditionFalse, ReasonProbeFailed)
+				cond := apimeta.FindStatusCondition(p.Status.Conditions, crawlv1alpha1.ConditionHealthy)
+				if !strings.Contains(cond.Message, "CONNECT refused") {
+					t.Errorf("condition message %q does not carry the probe error", cond.Message)
+				}
+			},
+		},
+		{
+			name:      "no verdict yet stays Provisioning without a Healthy condition",
+			proxy:     managedProxy(withProviderID("stub-id-1"), withSpecHashAnnotation(freshHash)),
+			stub:      runningStub(),
+			health:    fakeSnapshotter{ok: false},
+			wantPhase: crawlv1alpha1.PhaseProvisioning,
+			verify: func(t *testing.T, r *ProxyReconciler) {
+				p := getProxy(t, r)
+				if apimeta.FindStatusCondition(p.Status.Conditions, crawlv1alpha1.ConditionHealthy) != nil {
+					t.Error("Healthy condition present without an engine verdict")
+				}
+			},
+		},
+		{
+			name: "external proxy with a healthy verdict becomes Ready",
+			proxy: managedProxy(func(p *crawlv1alpha1.Proxy) {
+				p.Finalizers = nil
+				p.Spec = crawlv1alpha1.ProxySpec{
+					Mode:     crawlv1alpha1.ModeExternal,
+					Endpoint: &crawlv1alpha1.EndpointSpec{Host: "203.0.113.7"},
+				}
+			}),
+			stub: &stubProvider{},
+			health: fakeSnapshotter{ok: true, snap: health.Snapshot{
+				Healthy: true, Latency: 5 * time.Millisecond, LastProbe: probeTime,
+			}},
+			wantPhase: crawlv1alpha1.PhaseReady,
+			verify: func(t *testing.T, r *ProxyReconciler) {
+				assertCondition(t, getProxy(t, r), crawlv1alpha1.ConditionHealthy, metav1.ConditionTrue, ReasonProbeSucceeded)
+			},
+		},
+		{
+			name: "creating a replacement clears the stale Healthy verdict",
+			proxy: managedProxy(func(p *crawlv1alpha1.Proxy) {
+				p.Status.Conditions = []metav1.Condition{{
+					Type: crawlv1alpha1.ConditionHealthy, Status: metav1.ConditionTrue,
+					Reason: ReasonProbeSucceeded, LastTransitionTime: metav1.Now(),
+				}}
+				p.Status.LatencyMillis = 42
+				p.Status.LastHealthCheckTime = &metav1.Time{Time: probeTime}
+			}),
+			stub:      &stubProvider{createID: "stub-id-2"},
+			health:    fakeSnapshotter{ok: false},
+			wantPhase: crawlv1alpha1.PhaseProvisioning,
+			verify: func(t *testing.T, r *ProxyReconciler) {
+				p := getProxy(t, r)
+				if apimeta.FindStatusCondition(p.Status.Conditions, crawlv1alpha1.ConditionHealthy) != nil {
+					t.Error("stale Healthy condition survived instance creation")
+				}
+				if p.Status.LatencyMillis != 0 || p.Status.LastHealthCheckTime != nil {
+					t.Error("stale latency fields survived instance creation")
+				}
+			},
+		},
+	}
+
+	for _, tc := range tests {
+		t.Run(tc.name, func(t *testing.T) {
+			t.Parallel()
+			r := newTestReconciler(t, tc.stub, tc.proxy)
+			r.Health = tc.health
+			if _, err := doReconcile(t, r); err != nil {
+				t.Fatalf("Reconcile: %v", err)
+			}
+			if got := getProxy(t, r).Status.Phase; got != tc.wantPhase {
+				t.Errorf("phase = %s, want %s", got, tc.wantPhase)
+			}
+			tc.verify(t, r)
+		})
+	}
+}
+
+// A nil Health snapshotter must disable representation entirely.
+func TestReconcile_nilHealthSnapshotter(t *testing.T) {
+	t.Parallel()
+	freshHash := specHash(managedProxy(), "")
+	r := newTestReconciler(t,
+		&stubProvider{getInst: &provider.Instance{ID: "stub-id-1", IP: "10.1.2.3", State: provider.StateRunning}},
+		managedProxy(withProviderID("stub-id-1"), withSpecHashAnnotation(freshHash)))
+
+	if _, err := doReconcile(t, r); err != nil {
+		t.Fatalf("Reconcile: %v", err)
+	}
+	p := getProxy(t, r)
+	if apimeta.FindStatusCondition(p.Status.Conditions, crawlv1alpha1.ConditionHealthy) != nil {
+		t.Error("Healthy condition written with no snapshotter configured")
+	}
+	if p.Status.Phase != crawlv1alpha1.PhaseProvisioning {
+		t.Errorf("phase = %s, want Provisioning", p.Status.Phase)
+	}
+}

internal/controller/proxy_controller.go

@@ -18,46 +18,411 @@ package controller
 
 import (
 	"context"
+	"errors"
+	"fmt"
+	"time"
 
+	corev1 "k8s.io/api/core/v1"
+	apierrors "k8s.io/apimachinery/pkg/api/errors"
+	apimeta "k8s.io/apimachinery/pkg/api/meta"
+	metav1 "k8s.io/apimachinery/pkg/apis/meta/v1"
 	"k8s.io/apimachinery/pkg/runtime"
+	"k8s.io/apimachinery/pkg/types"
 	ctrl "sigs.k8s.io/controller-runtime"
 	"sigs.k8s.io/controller-runtime/pkg/client"
+	"sigs.k8s.io/controller-runtime/pkg/controller"
+	"sigs.k8s.io/controller-runtime/pkg/controller/controllerutil"
+	"sigs.k8s.io/controller-runtime/pkg/event"
+	"sigs.k8s.io/controller-runtime/pkg/handler"
 	logf "sigs.k8s.io/controller-runtime/pkg/log"
+	"sigs.k8s.io/controller-runtime/pkg/reconcile"
+	"sigs.k8s.io/controller-runtime/pkg/source"
 
 	crawlv1alpha1 "gitea.home.hrajfrisbee.cz/kacerr/egress-proxies-operator/api/v1alpha1"
+	"gitea.home.hrajfrisbee.cz/kacerr/egress-proxies-operator/internal/health"
+	"gitea.home.hrajfrisbee.cz/kacerr/egress-proxies-operator/internal/provider"
 )
 
-// ProxyReconciler reconciles a Proxy object
+// HealthSnapshotter provides the current probe verdict for a proxy. The
+// health engine implements it; the reconciler is its only consumer, turning
+// snapshots into the Healthy condition — the engine owns health state, the
+// reconciler owns its representation.
+type HealthSnapshotter interface {
+	Snapshot(key types.NamespacedName) (health.Snapshot, bool)
+}
+
+// ProxyReconciler reconciles Proxy objects as a state machine: every
+// reconcile derives exactly one action from (spec, status, provider Get),
+// performs it, and requeues. Status is written at most once per reconcile,
+// by the deferred patch in Reconcile.
 type ProxyReconciler struct {
 	client.Client
 	Scheme *runtime.Scheme
+
+	// Providers maps spec.provider values to configured backends.
+	Providers map[string]provider.Provider
+
+	// Health supplies probe verdicts; nil disables health representation
+	// (the Healthy condition simply never appears).
+	Health HealthSnapshotter
+	// HealthEvents, when non-nil, is watched as a raw source so the health
+	// engine can enqueue proxies on status-affecting transitions.
+	HealthEvents <-chan event.GenericEvent
+
+	// Poll intervals are struct fields, never consts, so tests can shrink
+	// them to milliseconds.
+	ProvisioningPoll time.Duration // while waiting for an instance to reach Running
+	DriftPoll        time.Duration // between re-checks of a Running instance
+	DeletionPoll     time.Duration // while waiting for an instance to disappear
+	QuotaRetry       time.Duration // after ErrQuotaExceeded; slow, off the backoff curve
+	RequeueNow       time.Duration // "process the next state promptly" (Result.Requeue is deprecated)
 }
 
 // +kubebuilder:rbac:groups=crawl.example.com,resources=proxies,verbs=get;list;watch;create;update;patch;delete
 // +kubebuilder:rbac:groups=crawl.example.com,resources=proxies/status,verbs=get;update;patch
 // +kubebuilder:rbac:groups=crawl.example.com,resources=proxies/finalizers,verbs=update
+// +kubebuilder:rbac:groups="",resources=secrets,verbs=get;list;watch
 
-// Reconcile is part of the main kubernetes reconciliation loop which aims to
-// move the current state of the cluster closer to the desired state.
-// TODO(user): Modify the Reconcile function to compare the state specified by
-// the Proxy object against the actual cluster state, and then
-// perform operations to make the cluster state reflect the state specified by
-// the user.
-//
-// For more details, check Reconcile and its Result here:
-// - https://pkg.go.dev/sigs.k8s.io/controller-runtime@v0.24.1/pkg/reconcile
-func (r *ProxyReconciler) Reconcile(ctx context.Context, req ctrl.Request) (ctrl.Result, error) {
-	_ = logf.FromContext(ctx)
+// Reconcile fetches the Proxy named by req into p (r.Get fills the struct
+// through the pointer), dispatches to the delete/external/managed state
+// machines, and flushes any status change exactly once on the way out.
+func (r *ProxyReconciler) Reconcile(ctx context.Context, req ctrl.Request) (res ctrl.Result, err error) {
+	var p crawlv1alpha1.Proxy
+	if err := r.Get(ctx, req.NamespacedName, &p); err != nil {
+		return ctrl.Result{}, client.IgnoreNotFound(err)
+	}
+	base := p.DeepCopy()
+	defer func() {
+		// NotFound is expected when this reconcile just removed the last
+		// finalizer and the object is already gone.
+		if perr := r.patchStatusIfChanged(ctx, base, &p); perr != nil && !apierrors.IsNotFound(perr) {
+			err = errors.Join(err, perr)
+		}
+	}()
 
-	// TODO(user): your logic here
+	switch {
+	case !p.DeletionTimestamp.IsZero():
+		return r.reconcileDelete(ctx, &p)
+	case p.Spec.Mode == crawlv1alpha1.ModeExternal:
+		return r.reconcileExternal(ctx, &p)
+	default:
+		return r.reconcileManaged(ctx, &p)
+	}
+}
 
+func (r *ProxyReconciler) reconcileManaged(ctx context.Context, p *crawlv1alpha1.Proxy) (ctrl.Result, error) {
+	log := logf.FromContext(ctx)
+
+	if controllerutil.AddFinalizer(p, crawlv1alpha1.FinalizerName) {
+		// The Update event re-triggers reconciliation; provisioning starts
+		// on the next pass, with the finalizer safely persisted first.
+		return ctrl.Result{}, r.Update(ctx, p)
+	}
+
+	// Permanent-failure latch: once this generation has failed permanently,
+	// stop calling the provider until the spec changes.
+	if cond := apimeta.FindStatusCondition(p.Status.Conditions, crawlv1alpha1.ConditionProvisioned); cond != nil &&
+		cond.Status == metav1.ConditionFalse && cond.Reason == ReasonPermanentError &&
+		cond.ObservedGeneration == p.Generation {
 		return ctrl.Result{}, nil
 	}
 
-// SetupWithManager sets up the controller with the Manager.
+	prov, ok := r.Providers[p.Spec.Provider]
+	if !ok {
+		setProvisioned(p, metav1.ConditionFalse, ReasonPermanentError,
+			fmt.Sprintf("provider %q is not configured", p.Spec.Provider))
+		return ctrl.Result{}, nil
+	}
+
+	cloudInit, err := r.resolveCloudInit(ctx, p)
+	if err != nil {
+		setProvisioned(p, metav1.ConditionFalse, ReasonCloudInitError, err.Error())
+		return ctrl.Result{}, err
+	}
+	hash := specHash(p, cloudInit)
+
+	if p.Status.ProviderID == "" {
+		id, err := prov.Create(ctx, provider.CreateRequest{
+			Name:      provider.NameFromUID(p.UID),
+			UID:       string(p.UID),
+			Namespace: p.Namespace,
+			ProxyName: p.Name,
+			Placement: placementFrom(p.Spec.Placement),
+			CloudInit: cloudInit,
+			Port:      p.EffectivePort(),
+		})
+		if err != nil {
+			return r.providerFailure(p, err)
+		}
+		log.Info("created instance", "provider", p.Spec.Provider, "providerID", id)
+		if err := r.setSpecHash(ctx, p, hash); err != nil {
+			return ctrl.Result{}, err
+		}
+		p.Status.ProviderID = id
+		p.Status.IP = ""
+		setProvisioned(p, metav1.ConditionFalse, ReasonProvisioning, "instance created; waiting for it to run")
+		// Any Healthy verdict belonged to the previous instance; the health
+		// engine starts fresh for the new one (its state was pruned while
+		// the proxy had no IP), and so must the status.
+		apimeta.RemoveStatusCondition(&p.Status.Conditions, crawlv1alpha1.ConditionHealthy)
+		p.Status.LatencyMillis = 0
+		p.Status.LastHealthCheckTime = nil
+		return ctrl.Result{RequeueAfter: r.ProvisioningPoll}, nil
+	}
+
+	if ann := p.Annotations[crawlv1alpha1.AnnotationSpecHash]; ann != hash {
+		if ann == "" {
+			// Adopt: an instance provisioned before the hash-input struct
+			// gained a field (or by an older operator version) keeps its
+			// instance; replacing the whole fleet on upgrade would be wrong.
+			if err := r.setSpecHash(ctx, p, hash); err != nil {
+				return ctrl.Result{}, err
+			}
+			return ctrl.Result{RequeueAfter: r.RequeueNow}, nil
+		}
+		return r.replaceInstance(ctx, p, prov, hash)
+	}
+
+	inst, err := prov.Get(ctx, p.Status.ProviderID)
+	if provider.Class(err) == provider.ErrNotFound {
+		p.Status.ProviderID = ""
+		p.Status.IP = ""
+		return ctrl.Result{RequeueAfter: r.RequeueNow}, nil
+	}
+	if err != nil {
+		return r.providerFailure(p, err)
+	}
+
+	switch inst.State {
+	case provider.StateProvisioning:
+		p.Status.IP = ""
+		setProvisioned(p, metav1.ConditionFalse, ReasonProvisioning, "waiting for the instance to run")
+		return ctrl.Result{RequeueAfter: r.ProvisioningPoll}, nil
+	case provider.StateRunning:
+		p.Status.IP = inst.IP
+		setProvisioned(p, metav1.ConditionTrue, ReasonCreated, "instance is running")
+		r.applyHealth(p)
+		return ctrl.Result{RequeueAfter: r.DriftPoll}, nil
+	default: // Stopped, Terminated: cattle, not pets — delete and recreate.
+		if err := prov.Delete(ctx, p.Status.ProviderID); err != nil {
+			return r.providerFailure(p, err)
+		}
+		log.Info("deleting instance for recreation", "providerID", p.Status.ProviderID, "state", inst.State)
+		p.Status.IP = ""
+		setProvisioned(p, metav1.ConditionFalse, ReasonRecreating,
+			fmt.Sprintf("instance is %s; deleting it for recreation", inst.State))
+		return ctrl.Result{RequeueAfter: r.DeletionPoll}, nil
+	}
+}
+
+// replaceInstance handles a spec-hash mismatch. The replacement instance has
+// the same deterministic name as the old one (both derive from the CR UID),
+// so recreating before the old instance is fully gone would hit "already
+// exists" — hence: delete, poll to NotFound, only then advance the hash and
+// let the create branch run.
+func (r *ProxyReconciler) replaceInstance(ctx context.Context, p *crawlv1alpha1.Proxy, prov provider.Provider, hash string) (ctrl.Result, error) {
+	_, err := prov.Get(ctx, p.Status.ProviderID)
+	if provider.Class(err) == provider.ErrNotFound {
+		// Old instance is gone. The Update inside setSpecHash refreshes p
+		// from the server — including status — so the status clear must be
+		// staged after it, or it would be silently overwritten. A crash
+		// between the two writes recovers either way: the create branch's
+		// Create is idempotent by name, and a stale ID resolves to NotFound
+		// again.
+		if err := r.setSpecHash(ctx, p, hash); err != nil {
+			return ctrl.Result{}, err
+		}
+		p.Status.ProviderID = ""
+		p.Status.IP = ""
+		return ctrl.Result{RequeueAfter: r.RequeueNow}, nil
+	}
+	if err != nil {
+		return r.providerFailure(p, err)
+	}
+	if err := prov.Delete(ctx, p.Status.ProviderID); err != nil {
+		return r.providerFailure(p, err)
+	}
+	logf.FromContext(ctx).Info("replacing instance after spec change", "providerID", p.Status.ProviderID)
+	p.Status.IP = ""
+	setProvisioned(p, metav1.ConditionFalse, ReasonReplacing, "spec changed; deleting the old instance before recreating")
+	return ctrl.Result{RequeueAfter: r.DeletionPoll}, nil
+}
+
+func (r *ProxyReconciler) reconcileDelete(ctx context.Context, p *crawlv1alpha1.Proxy) (ctrl.Result, error) {
+	if !controllerutil.ContainsFinalizer(p, crawlv1alpha1.FinalizerName) {
+		return ctrl.Result{}, nil
+	}
+	if p.Status.ProviderID == "" {
+		// Nothing was ever recorded as created; orphan GC reaps any stray
+		// instance a crashed create might have left behind.
+		controllerutil.RemoveFinalizer(p, crawlv1alpha1.FinalizerName)
+		return ctrl.Result{}, r.Update(ctx, p)
+	}
+	prov, ok := r.Providers[p.Spec.Provider]
+	if !ok {
+		return ctrl.Result{}, fmt.Errorf(
+			"provider %q is not configured; cannot clean up instance %s", p.Spec.Provider, p.Status.ProviderID)
+	}
+	_, err := prov.Get(ctx, p.Status.ProviderID)
+	if provider.Class(err) == provider.ErrNotFound {
+		controllerutil.RemoveFinalizer(p, crawlv1alpha1.FinalizerName)
+		return ctrl.Result{}, r.Update(ctx, p)
+	}
+	if err != nil {
+		return r.deletionFailure(err)
+	}
+	if err := prov.Delete(ctx, p.Status.ProviderID); err != nil {
+		return r.deletionFailure(err)
+	}
+	logf.FromContext(ctx).Info("deleting instance", "providerID", p.Status.ProviderID)
+	setProvisioned(p, metav1.ConditionFalse, ReasonDeleting, "deleting the instance before removing the finalizer")
+	return ctrl.Result{RequeueAfter: r.DeletionPoll}, nil
+}
+
+func (r *ProxyReconciler) reconcileExternal(_ context.Context, p *crawlv1alpha1.Proxy) (ctrl.Result, error) {
+	if p.Spec.Endpoint == nil {
+		// CEL guarantees an endpoint on any object that went through the API
+		// server; tolerate its absence instead of panicking.
+		setProvisioned(p, metav1.ConditionFalse, ReasonPermanentError, "external proxy has no endpoint")
+		return ctrl.Result{}, nil
+	}
+	p.Status.IP = p.Spec.Endpoint.Host
+	setProvisioned(p, metav1.ConditionTrue, ReasonExternalEndpoint, "tracking an external endpoint")
+	r.applyHealth(p)
+	return ctrl.Result{}, nil
+}
+
+// providerFailure translates a classified provider error into the
+// state-machine's reaction: transient errors ride the workqueue's
+// exponential backoff, quota errors back off slowly without counting as
+// errors, and permanent errors latch Failed and stop retrying.
+func (r *ProxyReconciler) providerFailure(p *crawlv1alpha1.Proxy, err error) (ctrl.Result, error) {
+	switch provider.Class(err) {
+	case provider.ErrQuotaExceeded:
+		setProvisioned(p, metav1.ConditionFalse, ReasonQuotaExceeded, err.Error())
+		return ctrl.Result{RequeueAfter: r.QuotaRetry}, nil
+	case provider.ErrPermanent:
+		setProvisioned(p, metav1.ConditionFalse, ReasonPermanentError, err.Error())
+		return ctrl.Result{}, nil
+	default:
+		return ctrl.Result{}, err
+	}
+}
+
+// deletionFailure is providerFailure for the finalizer path, where latching
+// a permanent failure would wedge the object forever with no retry — keep
+// retrying instead, visibly, until cleanup succeeds or an operator
+// intervenes.
+func (r *ProxyReconciler) deletionFailure(err error) (ctrl.Result, error) {
+	if provider.Class(err) == provider.ErrQuotaExceeded {
+		return ctrl.Result{RequeueAfter: r.QuotaRetry}, nil
+	}
+	return ctrl.Result{}, err
+}
+
+// resolveCloudInit returns the effective cloud-init user-data, reading the
+// referenced Secret if one is used. Both the spec hash and CreateRequest see
+// only resolved content, so rotating a Secret triggers replacement.
+func (r *ProxyReconciler) resolveCloudInit(ctx context.Context, p *crawlv1alpha1.Proxy) (string, error) {
+	ci := p.Spec.CloudInit
+	if ci == nil {
+		return "", nil
+	}
+	if ci.Inline != "" {
+		return ci.Inline, nil
+	}
+	if ci.SecretRef == nil {
+		return "", nil
+	}
+	key := ci.SecretRef.Key
+	if key == "" {
+		key = crawlv1alpha1.DefaultCloudInitSecretKey
+	}
+	var sec corev1.Secret
+	if err := r.Get(ctx, client.ObjectKey{Namespace: p.Namespace, Name: ci.SecretRef.Name}, &sec); err != nil {
+		return "", fmt.Errorf("resolving cloudInit secret %q: %w", ci.SecretRef.Name, err)
+	}
+	data, ok := sec.Data[key]
+	if !ok {
+		return "", fmt.Errorf("cloudInit secret %q has no key %q", ci.SecretRef.Name, key)
+	}
+	return string(data), nil
+}
+
+// setSpecHash persists the spec-hash annotation. Status changes staged on p
+// are untouched by the Update (they live on the status subresource) and are
+// flushed by the deferred patch in Reconcile.
+func (r *ProxyReconciler) setSpecHash(ctx context.Context, p *crawlv1alpha1.Proxy, hash string) error {
+	if p.Annotations[crawlv1alpha1.AnnotationSpecHash] == hash {
+		return nil
+	}
+	if p.Annotations == nil {
+		p.Annotations = map[string]string{}
+	}
+	p.Annotations[crawlv1alpha1.AnnotationSpecHash] = hash
+	return r.Update(ctx, p)
+}
+
+func placementFrom(ps *crawlv1alpha1.PlacementSpec) provider.Placement {
+	if ps == nil {
+		return provider.Placement{}
+	}
+	return provider.Placement{
+		Region:      ps.Region,
+		Zone:        ps.Zone,
+		MachineType: ps.MachineType,
+		Image:       ps.Image,
+	}
+}
+
+// proxiesForSecret maps a Secret event to the Proxies whose cloudInit
+// references it, so rotating a Secret re-triggers the replacement check.
+func (r *ProxyReconciler) proxiesForSecret(ctx context.Context, obj client.Object) []reconcile.Request {
+	var list crawlv1alpha1.ProxyList
+	if err := r.List(ctx, &list, client.InNamespace(obj.GetNamespace())); err != nil {
+		logf.FromContext(ctx).Error(err, "listing proxies for secret event", "secret", obj.GetName())
+		return nil
+	}
+	var reqs []reconcile.Request
+	for i := range list.Items {
+		p := &list.Items[i]
+		if ci := p.Spec.CloudInit; ci != nil && ci.SecretRef != nil && ci.SecretRef.Name == obj.GetName() {
+			reqs = append(reqs, reconcile.Request{NamespacedName: client.ObjectKeyFromObject(p)})
+		}
+	}
+	return reqs
+}
+
+// SetupWithManager sets up the controller with the Manager. The Secret watch
+// only fires for Secrets the manager's cache holds; the composition root
+// (cmd/main.go) restricts that cache to labelled cloud-init Secrets.
 func (r *ProxyReconciler) SetupWithManager(mgr ctrl.Manager) error {
-	return ctrl.NewControllerManagedBy(mgr).
+	r.applyDefaults()
+	b := ctrl.NewControllerManagedBy(mgr).
 		For(&crawlv1alpha1.Proxy{}).
 		Named("proxy").
-		Complete(r)
+		Watches(&corev1.Secret{}, handler.EnqueueRequestsFromMapFunc(r.proxiesForSecret)).
+		WithOptions(controller.Options{MaxConcurrentReconciles: 3})
+	if r.HealthEvents != nil {
+		b = b.WatchesRawSource(source.Channel(r.HealthEvents, &handler.EnqueueRequestForObject{}))
+	}
+	return b.Complete(r)
+}
+
+func (r *ProxyReconciler) applyDefaults() {
+	if r.ProvisioningPoll == 0 {
+		r.ProvisioningPoll = 10 * time.Second
+	}
+	if r.DriftPoll == 0 {
+		r.DriftPoll = 2 * time.Minute
+	}
+	if r.DeletionPoll == 0 {
+		r.DeletionPoll = 10 * time.Second
+	}
+	if r.QuotaRetry == 0 {
+		r.QuotaRetry = 5 * time.Minute
+	}
+	if r.RequeueNow == 0 {
+		r.RequeueNow = time.Second
+	}
 }

internal/controller/proxy_controller_test.go

@@ -17,77 +17,250 @@ limitations under the License.
 package controller
 
 import (
-	"context"
+	"time"
 
 	. "github.com/onsi/ginkgo/v2"
 	. "github.com/onsi/gomega"
-	"k8s.io/apimachinery/pkg/api/errors"
-	"k8s.io/apimachinery/pkg/types"
-	"sigs.k8s.io/controller-runtime/pkg/reconcile"
-
+	apierrors "k8s.io/apimachinery/pkg/api/errors"
+	apimeta "k8s.io/apimachinery/pkg/api/meta"
 	metav1 "k8s.io/apimachinery/pkg/apis/meta/v1"
+	"k8s.io/apimachinery/pkg/types"
+	ctrl "sigs.k8s.io/controller-runtime"
 
 	crawlv1alpha1 "gitea.home.hrajfrisbee.cz/kacerr/egress-proxies-operator/api/v1alpha1"
+	"gitea.home.hrajfrisbee.cz/kacerr/egress-proxies-operator/internal/provider"
 )
 
-var _ = Describe("Proxy Controller", func() {
-	Context("When reconciling a resource", func() {
-		const (
-			resourceName      = "test-resource"
-			resourceNamespace = "default"
-		)
+// These specs drive the reconciler against a real envtest API server, so
+// CRD structural defaulting and CEL validation are live — the parts the
+// fake-client action-table tests can't cover. The provider stays a stub:
+// envtest has no kubelet or cloud, so instance state is simulated by
+// mutating the stub between reconciles.
+var _ = Describe("Proxy controller", func() {
+	const ns = "default"
 
-		ctx := context.Background()
-
-		typeNamespacedName := types.NamespacedName{
-			Name:      resourceName,
-			Namespace: resourceNamespace,
-		}
-		proxy := &crawlv1alpha1.Proxy{}
-
-		BeforeEach(func() {
-			By("creating the custom resource for the Kind Proxy")
-			err := k8sClient.Get(ctx, typeNamespacedName, proxy)
-			if err != nil && errors.IsNotFound(err) {
-				resource := &crawlv1alpha1.Proxy{
-					ObjectMeta: metav1.ObjectMeta{
-						Name:      resourceName,
-						Namespace: resourceNamespace,
-					},
-					// A minimal, schema-valid spec so this placeholder test survives the
-					// CEL/CRD validation added in Step 1. Rewritten wholesale in Step 4
-					// alongside the real reconciler and envtest suite.
-					Spec: crawlv1alpha1.ProxySpec{
-						Mode:     crawlv1alpha1.ModeExternal,
-						Endpoint: &crawlv1alpha1.EndpointSpec{Host: "10.0.0.1"},
-					},
-				}
-				Expect(k8sClient.Create(ctx, resource)).To(Succeed())
-			}
-		})
-
-		AfterEach(func() {
-			// TODO(user): Cleanup logic after each test, like removing the resource instance.
-			resource := &crawlv1alpha1.Proxy{}
-			err := k8sClient.Get(ctx, typeNamespacedName, resource)
-			Expect(err).NotTo(HaveOccurred())
-
-			By("Cleanup the specific resource instance Proxy")
-			Expect(k8sClient.Delete(ctx, resource)).To(Succeed())
-		})
-		It("should successfully reconcile the resource", func() {
-			By("Reconciling the created resource")
-			controllerReconciler := &ProxyReconciler{
+	newEnvtestReconciler := func(stub *stubProvider) *ProxyReconciler {
+		return &ProxyReconciler{
 			Client:           k8sClient,
 			Scheme:           k8sClient.Scheme(),
+			Providers:        map[string]provider.Provider{"stub": stub},
+			ProvisioningPoll: 50 * time.Millisecond,
+			DriftPoll:        100 * time.Millisecond,
+			DeletionPoll:     50 * time.Millisecond,
+			QuotaRetry:       200 * time.Millisecond,
+			RequeueNow:       10 * time.Millisecond,
+		}
 	}
 
-			_, err := controllerReconciler.Reconcile(ctx, reconcile.Request{
-				NamespacedName: typeNamespacedName,
+	envReconcile := func(r *ProxyReconciler, name string) (ctrl.Result, error) {
+		return r.Reconcile(ctx, ctrl.Request{
+			NamespacedName: types.NamespacedName{Namespace: ns, Name: name},
 		})
+	}
+
+	fetch := func(name string) *crawlv1alpha1.Proxy {
+		p := &crawlv1alpha1.Proxy{}
+		Expect(k8sClient.Get(ctx, types.NamespacedName{Namespace: ns, Name: name}, p)).To(Succeed())
+		return p
+	}
+
+	// cleanup drives a Managed proxy's finalizer to completion so one spec's
+	// leftovers can't leak into another. Registered via DeferCleanup so it
+	// runs even when the spec body fails mid-way.
+	cleanup := func(r *ProxyReconciler, stub *stubProvider, name string) {
+		p := &crawlv1alpha1.Proxy{}
+		err := k8sClient.Get(ctx, types.NamespacedName{Namespace: ns, Name: name}, p)
+		if apierrors.IsNotFound(err) {
+			return
+		}
 		Expect(err).NotTo(HaveOccurred())
-			// TODO(user): Add more specific assertions depending on your controller's reconciliation logic.
-			// Example: If you expect a certain status condition after reconciliation, verify it here.
-		})
+		Expect(k8sClient.Delete(ctx, p)).To(Succeed())
+		stub.getErr = provider.Wrap(provider.ErrNotFound, "get", "stub", "", nil)
+		for range 3 {
+			if _, err := envReconcile(r, name); err != nil {
+				break
+			}
+			if apierrors.IsNotFound(k8sClient.Get(ctx, types.NamespacedName{Namespace: ns, Name: name}, p)) {
+				return
+			}
+		}
+		Fail("cleanup did not drive the proxy " + name + " to deletion")
+	}
+
+	managedSpec := func() crawlv1alpha1.ProxySpec {
+		return crawlv1alpha1.ProxySpec{
+			Mode:     crawlv1alpha1.ModeManaged,
+			Provider: "stub",
+		}
+	}
+
+	It("provisions a Managed proxy through to Running", func() {
+		const name = "e2e-provision"
+		stub := &stubProvider{createID: "inst-1"}
+		r := newEnvtestReconciler(stub)
+		DeferCleanup(func() { cleanup(r, stub, name) })
+
+		Expect(k8sClient.Create(ctx, &crawlv1alpha1.Proxy{
+			ObjectMeta: metav1.ObjectMeta{Name: name, Namespace: ns},
+			Spec:       managedSpec(),
+		})).To(Succeed())
+
+		By("adding the finalizer on the first pass")
+		res, err := envReconcile(r, name)
+		Expect(err).NotTo(HaveOccurred())
+		Expect(res).To(Equal(ctrl.Result{}))
+		Expect(fetch(name).Finalizers).To(ContainElement(crawlv1alpha1.FinalizerName))
+
+		By("creating the instance on the second pass")
+		res, err = envReconcile(r, name)
+		Expect(err).NotTo(HaveOccurred())
+		Expect(res.RequeueAfter).To(Equal(r.ProvisioningPoll))
+		p := fetch(name)
+		Expect(p.Status.ProviderID).To(Equal("inst-1"))
+		Expect(p.Annotations).To(HaveKey(crawlv1alpha1.AnnotationSpecHash))
+		// The real API server defaulted spec.port; the create request must
+		// have seen it.
+		Expect(p.Spec.Port).To(Equal(crawlv1alpha1.DefaultPort))
+		Expect(stub.lastCreate.Port).To(Equal(crawlv1alpha1.DefaultPort))
+		Expect(stub.lastCreate.Name).To(Equal(provider.NameFromUID(p.UID)))
+
+		By("polling while the instance provisions")
+		stub.getInst = &provider.Instance{ID: "inst-1", State: provider.StateProvisioning}
+		res, err = envReconcile(r, name)
+		Expect(err).NotTo(HaveOccurred())
+		Expect(res.RequeueAfter).To(Equal(r.ProvisioningPoll))
+		Expect(fetch(name).Status.Phase).To(Equal(crawlv1alpha1.PhaseProvisioning))
+
+		By("publishing the IP once the instance runs")
+		stub.getInst = &provider.Instance{ID: "inst-1", IP: "10.9.8.7", State: provider.StateRunning}
+		res, err = envReconcile(r, name)
+		Expect(err).NotTo(HaveOccurred())
+		Expect(res.RequeueAfter).To(Equal(r.DriftPoll))
+		p = fetch(name)
+		Expect(p.Status.IP).To(Equal("10.9.8.7"))
+		cond := apimeta.FindStatusCondition(p.Status.Conditions, crawlv1alpha1.ConditionProvisioned)
+		Expect(cond).NotTo(BeNil())
+		Expect(cond.Status).To(Equal(metav1.ConditionTrue))
+		Expect(p.Status.ObservedGeneration).To(Equal(p.Generation))
+	})
+
+	It("replaces the instance when the spec changes", func() {
+		const name = "e2e-replace"
+		stub := &stubProvider{createID: "inst-old"}
+		r := newEnvtestReconciler(stub)
+		DeferCleanup(func() { cleanup(r, stub, name) })
+
+		Expect(k8sClient.Create(ctx, &crawlv1alpha1.Proxy{
+			ObjectMeta: metav1.ObjectMeta{Name: name, Namespace: ns},
+			Spec:       managedSpec(),
+		})).To(Succeed())
+		_, err := envReconcile(r, name)
+		Expect(err).NotTo(HaveOccurred())
+		_, err = envReconcile(r, name)
+		Expect(err).NotTo(HaveOccurred())
+		stub.getInst = &provider.Instance{ID: "inst-old", IP: "10.0.0.1", State: provider.StateRunning}
+		_, err = envReconcile(r, name)
+		Expect(err).NotTo(HaveOccurred())
+		oldHash := fetch(name).Annotations[crawlv1alpha1.AnnotationSpecHash]
+
+		By("editing a replacement-triggering field")
+		p := fetch(name)
+		p.Spec.Port = 8080
+		Expect(k8sClient.Update(ctx, p)).To(Succeed())
+
+		By("deleting the old instance first")
+		res, err := envReconcile(r, name)
+		Expect(err).NotTo(HaveOccurred())
+		Expect(res.RequeueAfter).To(Equal(r.DeletionPoll))
+		Expect(stub.deleteCalls).To(Equal(1))
+		p = fetch(name)
+		Expect(p.Annotations[crawlv1alpha1.AnnotationSpecHash]).To(Equal(oldHash),
+			"hash must not advance while the old instance still exists")
+		cond := apimeta.FindStatusCondition(p.Status.Conditions, crawlv1alpha1.ConditionProvisioned)
+		Expect(cond.Reason).To(Equal(ReasonReplacing))
+
+		By("advancing the hash once the old instance is gone")
+		stub.getErr = provider.Wrap(provider.ErrNotFound, "get", "stub", "inst-old", nil)
+		_, err = envReconcile(r, name)
+		Expect(err).NotTo(HaveOccurred())
+		p = fetch(name)
+		Expect(p.Status.ProviderID).To(BeEmpty())
+		Expect(p.Annotations[crawlv1alpha1.AnnotationSpecHash]).NotTo(Equal(oldHash))
+
+		By("creating the replacement")
+		stub.createID = "inst-new"
+		stub.getErr = nil
+		stub.getInst = nil
+		res, err = envReconcile(r, name)
+		Expect(err).NotTo(HaveOccurred())
+		Expect(res.RequeueAfter).To(Equal(r.ProvisioningPoll))
+		Expect(stub.createCalls).To(Equal(2))
+		Expect(fetch(name).Status.ProviderID).To(Equal("inst-new"))
+		Expect(stub.lastCreate.Port).To(Equal(int32(8080)))
+	})
+
+	It("cleans up the instance on delete via the finalizer", func() {
+		const name = "e2e-delete"
+		stub := &stubProvider{createID: "inst-del"}
+		r := newEnvtestReconciler(stub)
+		DeferCleanup(func() { cleanup(r, stub, name) })
+
+		Expect(k8sClient.Create(ctx, &crawlv1alpha1.Proxy{
+			ObjectMeta: metav1.ObjectMeta{Name: name, Namespace: ns},
+			Spec:       managedSpec(),
+		})).To(Succeed())
+		_, err := envReconcile(r, name)
+		Expect(err).NotTo(HaveOccurred())
+		_, err = envReconcile(r, name)
+		Expect(err).NotTo(HaveOccurred())
+		stub.getInst = &provider.Instance{ID: "inst-del", IP: "10.0.0.2", State: provider.StateRunning}
+		_, err = envReconcile(r, name)
+		Expect(err).NotTo(HaveOccurred())
+
+		By("deleting the CR — the finalizer holds it")
+		Expect(k8sClient.Delete(ctx, fetch(name))).To(Succeed())
+		res, err := envReconcile(r, name)
+		Expect(err).NotTo(HaveOccurred())
+		Expect(res.RequeueAfter).To(Equal(r.DeletionPoll))
+		Expect(stub.deleteCalls).To(Equal(1))
+		Expect(fetch(name).Status.Phase).To(Equal(crawlv1alpha1.PhaseDeleting))
+
+		By("removing the finalizer once the instance is gone")
+		stub.getErr = provider.Wrap(provider.ErrNotFound, "get", "stub", "inst-del", nil)
+		_, err = envReconcile(r, name)
+		Expect(err).NotTo(HaveOccurred())
+		err = k8sClient.Get(ctx, types.NamespacedName{Namespace: ns, Name: name}, &crawlv1alpha1.Proxy{})
+		Expect(apierrors.IsNotFound(err)).To(BeTrue(), "proxy should be fully deleted")
+	})
+
+	It("tracks an External proxy without touching providers", func() {
+		const name = "e2e-external"
+		stub := &stubProvider{}
+		r := newEnvtestReconciler(stub)
+
+		Expect(k8sClient.Create(ctx, &crawlv1alpha1.Proxy{
+			ObjectMeta: metav1.ObjectMeta{Name: name, Namespace: ns},
+			Spec: crawlv1alpha1.ProxySpec{
+				Mode:     crawlv1alpha1.ModeExternal,
+				Endpoint: &crawlv1alpha1.EndpointSpec{Host: "203.0.113.7"},
+			},
+		})).To(Succeed())
+
+		res, err := envReconcile(r, name)
+		Expect(err).NotTo(HaveOccurred())
+		Expect(res).To(Equal(ctrl.Result{}))
+
+		p := fetch(name)
+		Expect(p.Status.IP).To(Equal("203.0.113.7"))
+		Expect(p.Finalizers).To(BeEmpty())
+		cond := apimeta.FindStatusCondition(p.Status.Conditions, crawlv1alpha1.ConditionProvisioned)
+		Expect(cond).NotTo(BeNil())
+		Expect(cond.Reason).To(Equal(ReasonExternalEndpoint))
+		Expect(stub.createCalls + stub.getCalls + stub.deleteCalls).To(BeZero())
+
+		By("deleting without any finalizer round-trip")
+		Expect(k8sClient.Delete(ctx, p)).To(Succeed())
+		err = k8sClient.Get(ctx, types.NamespacedName{Namespace: ns, Name: name}, &crawlv1alpha1.Proxy{})
+		Expect(apierrors.IsNotFound(err)).To(BeTrue())
 	})
 })

internal/controller/reconcile_test.go

@@ -0,0 +1,550 @@
+package controller
+
+import (
+	"context"
+	"testing"
+	"time"
+
+	corev1 "k8s.io/api/core/v1"
+	apierrors "k8s.io/apimachinery/pkg/api/errors"
+	apimeta "k8s.io/apimachinery/pkg/api/meta"
+	metav1 "k8s.io/apimachinery/pkg/apis/meta/v1"
+	"k8s.io/apimachinery/pkg/runtime"
+	"k8s.io/apimachinery/pkg/types"
+	ctrl "sigs.k8s.io/controller-runtime"
+	"sigs.k8s.io/controller-runtime/pkg/client"
+	"sigs.k8s.io/controller-runtime/pkg/client/fake"
+
+	crawlv1alpha1 "gitea.home.hrajfrisbee.cz/kacerr/egress-proxies-operator/api/v1alpha1"
+	"gitea.home.hrajfrisbee.cz/kacerr/egress-proxies-operator/internal/provider"
+)
+
+// Distinct per-interval values so an asserted ctrl.Result is unambiguous
+// about which action-table row produced it.
+const (
+	tProvisioningPoll = 11 * time.Second
+	tDriftPoll        = 22 * time.Second
+	tDeletionPoll     = 33 * time.Second
+	tQuotaRetry       = 44 * time.Second
+	tRequeueNow       = 55 * time.Millisecond
+)
+
+const (
+	testProxyName = "p1"
+	testNamespace = "default"
+	testUID       = types.UID("11111111-2222-3333-4444-555555555555")
+)
+
+// stubProvider is the plan's in-test Provider stub: a handful of lines, no
+// config format, no fault-injection surface beyond settable fields.
+type stubProvider struct {
+	createID  string
+	createErr error
+	getInst   *provider.Instance
+	getErr    error
+	deleteErr error
+
+	createCalls, getCalls, deleteCalls int
+	lastCreate                         provider.CreateRequest
+}
+
+func (s *stubProvider) Create(_ context.Context, req provider.CreateRequest) (string, error) {
+	s.createCalls++
+	s.lastCreate = req
+	if s.createErr != nil {
+		return "", s.createErr
+	}
+	return s.createID, nil
+}
+
+func (s *stubProvider) Get(_ context.Context, _ string) (*provider.Instance, error) {
+	s.getCalls++
+	if s.getErr != nil {
+		return nil, s.getErr
+	}
+	return s.getInst, nil
+}
+
+func (s *stubProvider) Delete(_ context.Context, _ string) error {
+	s.deleteCalls++
+	return s.deleteErr
+}
+
+func (s *stubProvider) ListByTag(context.Context) ([]provider.Instance, error) {
+	return nil, nil
+}
+
+func notFoundErr() error {
+	return provider.Wrap(provider.ErrNotFound, "get", "stub", "some-id", nil)
+}
+
+func testScheme(t *testing.T) *runtime.Scheme {
+	t.Helper()
+	s := runtime.NewScheme()
+	if err := crawlv1alpha1.AddToScheme(s); err != nil {
+		t.Fatalf("adding crawl scheme: %v", err)
+	}
+	if err := corev1.AddToScheme(s); err != nil {
+		t.Fatalf("adding core scheme: %v", err)
+	}
+	return s
+}
+
+// managedProxy returns a Managed proxy that already carries the finalizer —
+// the state most action-table rows start from. Mutators adjust from there.
+func managedProxy(mut ...func(*crawlv1alpha1.Proxy)) *crawlv1alpha1.Proxy {
+	p := &crawlv1alpha1.Proxy{
+		ObjectMeta: metav1.ObjectMeta{
+			Name:       testProxyName,
+			Namespace:  testNamespace,
+			UID:        testUID,
+			Generation: 1,
+			Finalizers: []string{crawlv1alpha1.FinalizerName},
+		},
+		Spec: crawlv1alpha1.ProxySpec{
+			Mode:     crawlv1alpha1.ModeManaged,
+			Provider: "stub",
+		},
+	}
+	for _, m := range mut {
+		m(p)
+	}
+	return p
+}
+
+func withProviderID(id string) func(*crawlv1alpha1.Proxy) {
+	return func(p *crawlv1alpha1.Proxy) { p.Status.ProviderID = id }
+}
+
+func withSpecHashAnnotation(hash string) func(*crawlv1alpha1.Proxy) {
+	return func(p *crawlv1alpha1.Proxy) {
+		if p.Annotations == nil {
+			p.Annotations = map[string]string{}
+		}
+		p.Annotations[crawlv1alpha1.AnnotationSpecHash] = hash
+	}
+}
+
+func deleting() func(*crawlv1alpha1.Proxy) {
+	return func(p *crawlv1alpha1.Proxy) {
+		now := metav1.Now()
+		p.DeletionTimestamp = &now
+	}
+}
+
+func newTestReconciler(t *testing.T, stub *stubProvider, objs ...client.Object) *ProxyReconciler {
+	t.Helper()
+	c := fake.NewClientBuilder().
+		WithScheme(testScheme(t)).
+		WithStatusSubresource(&crawlv1alpha1.Proxy{}).
+		WithObjects(objs...).
+		Build()
+	return &ProxyReconciler{
+		Client:           c,
+		Providers:        map[string]provider.Provider{"stub": stub},
+		ProvisioningPoll: tProvisioningPoll,
+		DriftPoll:        tDriftPoll,
+		DeletionPoll:     tDeletionPoll,
+		QuotaRetry:       tQuotaRetry,
+		RequeueNow:       tRequeueNow,
+	}
+}
+
+func doReconcile(t *testing.T, r *ProxyReconciler) (ctrl.Result, error) {
+	t.Helper()
+	return r.Reconcile(context.Background(), ctrl.Request{
+		NamespacedName: types.NamespacedName{Namespace: testNamespace, Name: testProxyName},
+	})
+}
+
+func getProxy(t *testing.T, r *ProxyReconciler) *crawlv1alpha1.Proxy {
+	t.Helper()
+	var p crawlv1alpha1.Proxy
+	if err := r.Get(context.Background(), types.NamespacedName{Namespace: testNamespace, Name: testProxyName}, &p); err != nil {
+		t.Fatalf("getting proxy: %v", err)
+	}
+	return &p
+}
+
+func assertCondition(t *testing.T, p *crawlv1alpha1.Proxy, condType string, status metav1.ConditionStatus, reason string) {
+	t.Helper()
+	cond := apimeta.FindStatusCondition(p.Status.Conditions, condType)
+	if cond == nil {
+		t.Fatalf("condition %s missing, have %+v", condType, p.Status.Conditions)
+	}
+	if cond.Status != status || cond.Reason != reason {
+		t.Errorf("condition %s = %s/%s, want %s/%s", condType, cond.Status, cond.Reason, status, reason)
+	}
+	if cond.ObservedGeneration != p.Generation {
+		t.Errorf("condition %s observedGeneration = %d, want %d", condType, cond.ObservedGeneration, p.Generation)
+	}
+}
+
+// TestReconcile_actionTable exercises every row of the plan's action table
+// by calling Reconcile directly against a fake client. Caveat (documented in
+// the plan): the fake client runs neither CEL validation nor structural
+// defaulting — the envtest suite covers those.
+func TestReconcile_actionTable(t *testing.T) {
+	t.Parallel()
+
+	// The fixture's hash: no placement, no cloud-init, defaulted port.
+	freshHash := specHash(managedProxy(), "")
+
+	tests := []struct {
+		name       string
+		proxy      *crawlv1alpha1.Proxy
+		extraObjs  []client.Object
+		stub       *stubProvider
+		wantResult ctrl.Result
+		wantErr    bool
+		verify     func(t *testing.T, r *ProxyReconciler, stub *stubProvider)
+	}{
+		{
+			name: "managed without finalizer gets one and stops",
+			proxy: managedProxy(func(p *crawlv1alpha1.Proxy) {
+				p.Finalizers = nil
+			}),
+			stub:       &stubProvider{},
+			wantResult: ctrl.Result{},
+			verify: func(t *testing.T, r *ProxyReconciler, stub *stubProvider) {
+				p := getProxy(t, r)
+				if len(p.Finalizers) != 1 || p.Finalizers[0] != crawlv1alpha1.FinalizerName {
+					t.Errorf("finalizers = %v, want [%s]", p.Finalizers, crawlv1alpha1.FinalizerName)
+				}
+				if stub.createCalls+stub.getCalls+stub.deleteCalls != 0 {
+					t.Errorf("provider was called before the finalizer was persisted")
+				}
+			},
+		},
+		{
+			name:       "empty providerID creates the instance",
+			proxy:      managedProxy(),
+			stub:       &stubProvider{createID: "stub-id-1"},
+			wantResult: ctrl.Result{RequeueAfter: tProvisioningPoll},
+			verify: func(t *testing.T, r *ProxyReconciler, stub *stubProvider) {
+				p := getProxy(t, r)
+				if p.Status.ProviderID != "stub-id-1" {
+					t.Errorf("providerID = %q, want stub-id-1", p.Status.ProviderID)
+				}
+				if got := p.Annotations[crawlv1alpha1.AnnotationSpecHash]; got != freshHash {
+					t.Errorf("spec-hash annotation = %q, want %q", got, freshHash)
+				}
+				assertCondition(t, p, crawlv1alpha1.ConditionProvisioned, metav1.ConditionFalse, ReasonProvisioning)
+				if p.Status.Phase != crawlv1alpha1.PhaseProvisioning {
+					t.Errorf("phase = %s, want Provisioning", p.Status.Phase)
+				}
+				want := provider.CreateRequest{
+					Name:      provider.NameFromUID(testUID),
+					UID:       string(testUID),
+					Namespace: testNamespace,
+					ProxyName: testProxyName,
+					Port:      crawlv1alpha1.DefaultPort,
+				}
+				if stub.lastCreate != want {
+					t.Errorf("CreateRequest = %+v, want %+v", stub.lastCreate, want)
+				}
+			},
+		},
+		{
+			name:       "provisioning instance polls again",
+			proxy:      managedProxy(withProviderID("stub-id-1"), withSpecHashAnnotation(freshHash)),
+			stub:       &stubProvider{getInst: &provider.Instance{ID: "stub-id-1", State: provider.StateProvisioning}},
+			wantResult: ctrl.Result{RequeueAfter: tProvisioningPoll},
+			verify: func(t *testing.T, r *ProxyReconciler, _ *stubProvider) {
+				p := getProxy(t, r)
+				if p.Status.IP != "" {
+					t.Errorf("ip = %q, want empty while provisioning", p.Status.IP)
+				}
+				assertCondition(t, p, crawlv1alpha1.ConditionProvisioned, metav1.ConditionFalse, ReasonProvisioning)
+			},
+		},
+		{
+			name:  "running instance publishes IP",
+			proxy: managedProxy(withProviderID("stub-id-1"), withSpecHashAnnotation(freshHash)),
+			stub: &stubProvider{
+				getInst: &provider.Instance{ID: "stub-id-1", IP: "10.1.2.3", State: provider.StateRunning},
+			},
+			wantResult: ctrl.Result{RequeueAfter: tDriftPoll},
+			verify: func(t *testing.T, r *ProxyReconciler, _ *stubProvider) {
+				p := getProxy(t, r)
+				if p.Status.IP != "10.1.2.3" {
+					t.Errorf("ip = %q, want 10.1.2.3", p.Status.IP)
+				}
+				assertCondition(t, p, crawlv1alpha1.ConditionProvisioned, metav1.ConditionTrue, ReasonCreated)
+				if p.Status.Phase != crawlv1alpha1.PhaseProvisioning {
+					t.Errorf("phase = %s, want Provisioning until a health verdict exists", p.Status.Phase)
+				}
+			},
+		},
+		{
+			name:       "stopped instance is deleted for recreation",
+			proxy:      managedProxy(withProviderID("stub-id-1"), withSpecHashAnnotation(freshHash)),
+			stub:       &stubProvider{getInst: &provider.Instance{ID: "stub-id-1", State: provider.StateStopped}},
+			wantResult: ctrl.Result{RequeueAfter: tDeletionPoll},
+			verify: func(t *testing.T, r *ProxyReconciler, stub *stubProvider) {
+				if stub.deleteCalls != 1 {
+					t.Errorf("deleteCalls = %d, want 1", stub.deleteCalls)
+				}
+				assertCondition(t, getProxy(t, r), crawlv1alpha1.ConditionProvisioned, metav1.ConditionFalse, ReasonRecreating)
+			},
+		},
+		{
+			name: "vanished instance clears ID for recreation",
+			proxy: managedProxy(withProviderID("stub-id-1"), withSpecHashAnnotation(freshHash),
+				func(p *crawlv1alpha1.Proxy) { p.Status.IP = "10.1.2.3" }),
+			stub:       &stubProvider{getErr: notFoundErr()},
+			wantResult: ctrl.Result{RequeueAfter: tRequeueNow},
+			verify: func(t *testing.T, r *ProxyReconciler, _ *stubProvider) {
+				p := getProxy(t, r)
+				if p.Status.ProviderID != "" || p.Status.IP != "" {
+					t.Errorf("providerID/ip = %q/%q, want both cleared", p.Status.ProviderID, p.Status.IP)
+				}
+			},
+		},
+		{
+			name:  "hash mismatch deletes the old instance",
+			proxy: managedProxy(withProviderID("stub-id-1"), withSpecHashAnnotation("stale-hash")),
+			stub: &stubProvider{
+				getInst: &provider.Instance{ID: "stub-id-1", IP: "10.1.2.3", State: provider.StateRunning},
+			},
+			wantResult: ctrl.Result{RequeueAfter: tDeletionPoll},
+			verify: func(t *testing.T, r *ProxyReconciler, stub *stubProvider) {
+				if stub.deleteCalls != 1 {
+					t.Errorf("deleteCalls = %d, want 1", stub.deleteCalls)
+				}
+				p := getProxy(t, r)
+				// The hash must not advance until the old instance is gone,
+				// or a crash would strand a half-replaced proxy.
+				if got := p.Annotations[crawlv1alpha1.AnnotationSpecHash]; got != "stale-hash" {
+					t.Errorf("spec-hash annotation = %q, want still stale-hash", got)
+				}
+				assertCondition(t, p, crawlv1alpha1.ConditionProvisioned, metav1.ConditionFalse, ReasonReplacing)
+			},
+		},
+		{
+			name:       "empty annotation adopts instead of replacing",
+			proxy:      managedProxy(withProviderID("stub-id-1")),
+			stub:       &stubProvider{},
+			wantResult: ctrl.Result{RequeueAfter: tRequeueNow},
+			verify: func(t *testing.T, r *ProxyReconciler, stub *stubProvider) {
+				p := getProxy(t, r)
+				if got := p.Annotations[crawlv1alpha1.AnnotationSpecHash]; got != freshHash {
+					t.Errorf("spec-hash annotation = %q, want %q", got, freshHash)
+				}
+				if p.Status.ProviderID != "stub-id-1" {
+					t.Errorf("providerID = %q, want untouched stub-id-1", p.Status.ProviderID)
+				}
+				if stub.deleteCalls != 0 {
+					t.Errorf("deleteCalls = %d, want 0 — adoption must not replace", stub.deleteCalls)
+				}
+			},
+		},
+		{
+			name:       "mismatch with instance gone advances the hash",
+			proxy:      managedProxy(withProviderID("stub-id-1"), withSpecHashAnnotation("stale-hash")),
+			stub:       &stubProvider{getErr: notFoundErr()},
+			wantResult: ctrl.Result{RequeueAfter: tRequeueNow},
+			verify: func(t *testing.T, r *ProxyReconciler, _ *stubProvider) {
+				p := getProxy(t, r)
+				if p.Status.ProviderID != "" {
+					t.Errorf("providerID = %q, want cleared", p.Status.ProviderID)
+				}
+				if got := p.Annotations[crawlv1alpha1.AnnotationSpecHash]; got != freshHash {
+					t.Errorf("spec-hash annotation = %q, want advanced to %q", got, freshHash)
+				}
+			},
+		},
+		{
+			name:       "deletion with no providerID removes the finalizer",
+			proxy:      managedProxy(deleting()),
+			stub:       &stubProvider{},
+			wantResult: ctrl.Result{},
+			verify: func(t *testing.T, r *ProxyReconciler, stub *stubProvider) {
+				assertProxyGone(t, r)
+				if stub.deleteCalls != 0 {
+					t.Errorf("deleteCalls = %d, want 0", stub.deleteCalls)
+				}
+			},
+		},
+		{
+			name:       "deletion with instance already gone removes the finalizer",
+			proxy:      managedProxy(deleting(), withProviderID("stub-id-1")),
+			stub:       &stubProvider{getErr: notFoundErr()},
+			wantResult: ctrl.Result{},
+			verify: func(t *testing.T, r *ProxyReconciler, _ *stubProvider) {
+				assertProxyGone(t, r)
+			},
+		},
+		{
+			name:  "deletion deletes the instance and polls",
+			proxy: managedProxy(deleting(), withProviderID("stub-id-1")),
+			stub: &stubProvider{
+				getInst: &provider.Instance{ID: "stub-id-1", State: provider.StateRunning},
+			},
+			wantResult: ctrl.Result{RequeueAfter: tDeletionPoll},
+			verify: func(t *testing.T, r *ProxyReconciler, stub *stubProvider) {
+				if stub.deleteCalls != 1 {
+					t.Errorf("deleteCalls = %d, want 1", stub.deleteCalls)
+				}
+				p := getProxy(t, r)
+				if p.Status.Phase != crawlv1alpha1.PhaseDeleting {
+					t.Errorf("phase = %s, want Deleting", p.Status.Phase)
+				}
+			},
+		},
+		{
+			name: "external proxy tracks its endpoint without a finalizer",
+			proxy: managedProxy(func(p *crawlv1alpha1.Proxy) {
+				p.Finalizers = nil
+				p.Spec = crawlv1alpha1.ProxySpec{
+					Mode:     crawlv1alpha1.ModeExternal,
+					Endpoint: &crawlv1alpha1.EndpointSpec{Host: "203.0.113.7", Port: 8080},
+				}
+			}),
+			stub:       &stubProvider{},
+			wantResult: ctrl.Result{},
+			verify: func(t *testing.T, r *ProxyReconciler, stub *stubProvider) {
+				p := getProxy(t, r)
+				if p.Status.IP != "203.0.113.7" {
+					t.Errorf("ip = %q, want the endpoint host", p.Status.IP)
+				}
+				if len(p.Finalizers) != 0 {
+					t.Errorf("finalizers = %v, want none on External", p.Finalizers)
+				}
+				assertCondition(t, p, crawlv1alpha1.ConditionProvisioned, metav1.ConditionTrue, ReasonExternalEndpoint)
+				if stub.createCalls+stub.getCalls+stub.deleteCalls != 0 {
+					t.Errorf("provider was called for an External proxy")
+				}
+			},
+		},
+		{
+			name:  "quota error backs off slowly without failing",
+			proxy: managedProxy(),
+			stub: &stubProvider{
+				createErr: provider.Wrap(provider.ErrQuotaExceeded, "create", "stub", "", nil),
+			},
+			wantResult: ctrl.Result{RequeueAfter: tQuotaRetry},
+			verify: func(t *testing.T, r *ProxyReconciler, _ *stubProvider) {
+				p := getProxy(t, r)
+				assertCondition(t, p, crawlv1alpha1.ConditionProvisioned, metav1.ConditionFalse, ReasonQuotaExceeded)
+				if p.Status.Phase == crawlv1alpha1.PhaseFailed {
+					t.Errorf("phase = Failed, want anything but — quota is a wait, not a failure")
+				}
+			},
+		},
+		{
+			name:  "permanent error latches Failed and stops calling the provider",
+			proxy: managedProxy(),
+			stub: &stubProvider{
+				createErr: provider.Wrap(provider.ErrPermanent, "create", "stub", "", nil),
+			},
+			wantResult: ctrl.Result{},
+			verify: func(t *testing.T, r *ProxyReconciler, stub *stubProvider) {
+				p := getProxy(t, r)
+				assertCondition(t, p, crawlv1alpha1.ConditionProvisioned, metav1.ConditionFalse, ReasonPermanentError)
+				if p.Status.Phase != crawlv1alpha1.PhaseFailed {
+					t.Errorf("phase = %s, want Failed", p.Status.Phase)
+				}
+				if res, err := doReconcile(t, r); err != nil || res != (ctrl.Result{}) {
+					t.Errorf("second reconcile = %+v, %v; want empty result, nil", res, err)
+				}
+				if stub.createCalls != 1 {
+					t.Errorf("createCalls = %d after latch, want 1", stub.createCalls)
+				}
+			},
+		},
+		{
+			name:  "transient error is returned for workqueue backoff",
+			proxy: managedProxy(),
+			stub: &stubProvider{
+				createErr: provider.Wrap(provider.ErrTransient, "create", "stub", "", nil),
+			},
+			wantResult: ctrl.Result{},
+			wantErr:    true,
+			verify: func(t *testing.T, r *ProxyReconciler, _ *stubProvider) {
+				p := getProxy(t, r)
+				if p.Status.Phase != crawlv1alpha1.PhasePending {
+					t.Errorf("phase = %s, want still Pending", p.Status.Phase)
+				}
+			},
+		},
+		{
+			name: "unconfigured provider is a permanent failure",
+			proxy: managedProxy(func(p *crawlv1alpha1.Proxy) {
+				p.Spec.Provider = "no-such-provider"
+			}),
+			stub:       &stubProvider{},
+			wantResult: ctrl.Result{},
+			verify: func(t *testing.T, r *ProxyReconciler, _ *stubProvider) {
+				p := getProxy(t, r)
+				assertCondition(t, p, crawlv1alpha1.ConditionProvisioned, metav1.ConditionFalse, ReasonPermanentError)
+				if p.Status.Phase != crawlv1alpha1.PhaseFailed {
+					t.Errorf("phase = %s, want Failed", p.Status.Phase)
+				}
+			},
+		},
+		{
+			name: "cloud-init secret is resolved into the create request",
+			proxy: managedProxy(func(p *crawlv1alpha1.Proxy) {
+				p.Spec.CloudInit = &crawlv1alpha1.CloudInitSpec{
+					SecretRef: &crawlv1alpha1.SecretKeySelector{Name: "ci-secret"},
+				}
+			}),
+			extraObjs: []client.Object{
+				&corev1.Secret{
+					ObjectMeta: metav1.ObjectMeta{Name: "ci-secret", Namespace: testNamespace},
+					Data:       map[string][]byte{"user-data": []byte("#cloud-config\npackages: [squid]")},
+				},
+			},
+			stub:       &stubProvider{createID: "stub-id-1"},
+			wantResult: ctrl.Result{RequeueAfter: tProvisioningPoll},
+			verify: func(t *testing.T, r *ProxyReconciler, stub *stubProvider) {
+				if want := "#cloud-config\npackages: [squid]"; stub.lastCreate.CloudInit != want {
+					t.Errorf("CreateRequest.CloudInit = %q, want the resolved secret content", stub.lastCreate.CloudInit)
+				}
+			},
+		},
+		{
+			name: "missing cloud-init secret errors and marks the condition",
+			proxy: managedProxy(func(p *crawlv1alpha1.Proxy) {
+				p.Spec.CloudInit = &crawlv1alpha1.CloudInitSpec{
+					SecretRef: &crawlv1alpha1.SecretKeySelector{Name: "absent"},
+				}
+			}),
+			stub:       &stubProvider{},
+			wantResult: ctrl.Result{},
+			wantErr:    true,
+			verify: func(t *testing.T, r *ProxyReconciler, stub *stubProvider) {
+				assertCondition(t, getProxy(t, r), crawlv1alpha1.ConditionProvisioned, metav1.ConditionFalse, ReasonCloudInitError)
+				if stub.createCalls != 0 {
+					t.Errorf("createCalls = %d, want 0 with unresolved cloud-init", stub.createCalls)
+				}
+			},
+		},
+	}
+
+	for _, tc := range tests {
+		t.Run(tc.name, func(t *testing.T) {
+			t.Parallel()
+			objs := append([]client.Object{tc.proxy}, tc.extraObjs...)
+			r := newTestReconciler(t, tc.stub, objs...)
+			res, err := doReconcile(t, r)
+			if (err != nil) != tc.wantErr {
+				t.Fatalf("Reconcile error = %v, wantErr %v", err, tc.wantErr)
+			}
+			if res != tc.wantResult {
+				t.Errorf("Result = %+v, want %+v", res, tc.wantResult)
+			}
+			tc.verify(t, r, tc.stub)
+		})
+	}
+}
+
+func assertProxyGone(t *testing.T, r *ProxyReconciler) {
+	t.Helper()
+	var p crawlv1alpha1.Proxy
+	err := r.Get(context.Background(), types.NamespacedName{Namespace: testNamespace, Name: testProxyName}, &p)
+	if !apierrors.IsNotFound(err) {
+		t.Errorf("proxy still exists (err=%v), want NotFound after finalizer removal", err)
+	}
+}

internal/controller/spechash.go

@@ -0,0 +1,41 @@
+package controller
+
+import (
+	"crypto/sha256"
+	"encoding/hex"
+	"encoding/json"
+
+	crawlv1alpha1 "gitea.home.hrajfrisbee.cz/kacerr/egress-proxies-operator/api/v1alpha1"
+)
+
+// specHashInput is the explicit set of fields whose change requires
+// replacing the instance. Deliberately not ProxySpec wholesale: adding a
+// spec field that doesn't affect the VM (attributes, maxLeases, healthCheck)
+// must not churn the fleet on operator upgrade.
+type specHashInput struct {
+	Placement *crawlv1alpha1.PlacementSpec `json:"placement,omitempty"`
+	CloudInit string                       `json:"cloudInit,omitempty"`
+	Port      int32                        `json:"port"`
+}
+
+// specHash returns the hex SHA-256 of the replacement-triggering spec
+// fields. cloudInit is the already-resolved content, so rotating a
+// referenced Secret changes the hash even though the spec is untouched.
+func specHash(p *crawlv1alpha1.Proxy, cloudInit string) string {
+	in := specHashInput{
+		Placement: p.Spec.Placement,
+		CloudInit: cloudInit,
+		Port:      p.EffectivePort(),
+	}
+	// nil and empty placement mean the same thing; hash them identically.
+	if in.Placement != nil && *in.Placement == (crawlv1alpha1.PlacementSpec{}) {
+		in.Placement = nil
+	}
+	b, err := json.Marshal(in)
+	if err != nil {
+		// A struct of strings and an int32 cannot fail to marshal.
+		panic(err)
+	}
+	sum := sha256.Sum256(b)
+	return hex.EncodeToString(sum[:])
+}

internal/controller/spechash_test.go

@@ -0,0 +1,118 @@
+package controller
+
+import (
+	"regexp"
+	"testing"
+
+	crawlv1alpha1 "gitea.home.hrajfrisbee.cz/kacerr/egress-proxies-operator/api/v1alpha1"
+)
+
+func hashProxy(mut ...func(*crawlv1alpha1.Proxy)) *crawlv1alpha1.Proxy {
+	p := &crawlv1alpha1.Proxy{
+		Spec: crawlv1alpha1.ProxySpec{
+			Mode:     crawlv1alpha1.ModeManaged,
+			Provider: "stub",
+			Port:     3128,
+			Placement: &crawlv1alpha1.PlacementSpec{
+				Zone:        "europe-west1-b",
+				MachineType: "e2-micro",
+			},
+		},
+	}
+	for _, m := range mut {
+		m(p)
+	}
+	return p
+}
+
+func TestSpecHash_stability(t *testing.T) {
+	t.Parallel()
+
+	p := hashProxy()
+	h1 := specHash(p, "cloud-init-content")
+	h2 := specHash(p.DeepCopy(), "cloud-init-content")
+	if h1 != h2 {
+		t.Errorf("same input hashed differently: %s vs %s", h1, h2)
+	}
+	if !regexp.MustCompile(`^[0-9a-f]{64}$`).MatchString(h1) {
+		t.Errorf("hash %q is not hex SHA-256", h1)
+	}
+
+	// Fields outside the replacement set must not affect the hash — that is
+	// the whole point of an explicit hash-input struct.
+	q := hashProxy(func(p *crawlv1alpha1.Proxy) {
+		p.Spec.Attributes = map[string]string{"geo": "eu"}
+		five := int32(5)
+		p.Spec.MaxLeases = &five
+		p.Spec.HealthCheck = &crawlv1alpha1.HealthCheckSpec{IntervalSeconds: 60}
+	})
+	if specHash(q, "cloud-init-content") != h1 {
+		t.Error("non-replacement spec fields changed the hash")
+	}
+}
+
+func TestSpecHash_normalization(t *testing.T) {
+	t.Parallel()
+
+	nilPlacement := hashProxy(func(p *crawlv1alpha1.Proxy) { p.Spec.Placement = nil })
+	emptyPlacement := hashProxy(func(p *crawlv1alpha1.Proxy) {
+		p.Spec.Placement = &crawlv1alpha1.PlacementSpec{}
+	})
+	if specHash(nilPlacement, "") != specHash(emptyPlacement, "") {
+		t.Error("nil and empty placement hashed differently")
+	}
+
+	// An unset port and an explicit default port mean the same instance.
+	unsetPort := hashProxy(func(p *crawlv1alpha1.Proxy) { p.Spec.Port = 0 })
+	defaultPort := hashProxy(func(p *crawlv1alpha1.Proxy) { p.Spec.Port = crawlv1alpha1.DefaultPort })
+	if specHash(unsetPort, "") != specHash(defaultPort, "") {
+		t.Error("unset port and explicit default port hashed differently")
+	}
+}
+
+func TestSpecHash_sensitivity(t *testing.T) {
+	t.Parallel()
+
+	base := specHash(hashProxy(), "cloud-init")
+
+	tests := []struct {
+		name      string
+		proxy     *crawlv1alpha1.Proxy
+		cloudInit string
+	}{
+		{
+			name:      "port change",
+			proxy:     hashProxy(func(p *crawlv1alpha1.Proxy) { p.Spec.Port = 8080 }),
+			cloudInit: "cloud-init",
+		},
+		{
+			name:      "zone change",
+			proxy:     hashProxy(func(p *crawlv1alpha1.Proxy) { p.Spec.Placement.Zone = "us-east1-c" }),
+			cloudInit: "cloud-init",
+		},
+		{
+			name:      "machine type change",
+			proxy:     hashProxy(func(p *crawlv1alpha1.Proxy) { p.Spec.Placement.MachineType = "e2-small" }),
+			cloudInit: "cloud-init",
+		},
+		{
+			name:      "image change",
+			proxy:     hashProxy(func(p *crawlv1alpha1.Proxy) { p.Spec.Placement.Image = "debian-13" }),
+			cloudInit: "cloud-init",
+		},
+		{
+			name:      "resolved cloud-init change (secret rotation)",
+			proxy:     hashProxy(),
+			cloudInit: "rotated-cloud-init",
+		},
+	}
+
+	for _, tc := range tests {
+		t.Run(tc.name, func(t *testing.T) {
+			t.Parallel()
+			if specHash(tc.proxy, tc.cloudInit) == base {
+				t.Error("hash did not change")
+			}
+		})
+	}
+}

internal/controller/status.go

@@ -0,0 +1,121 @@
+package controller
+
+import (
+	"context"
+	"fmt"
+
+	"k8s.io/apimachinery/pkg/api/equality"
+	apimeta "k8s.io/apimachinery/pkg/api/meta"
+	metav1 "k8s.io/apimachinery/pkg/apis/meta/v1"
+	"sigs.k8s.io/controller-runtime/pkg/client"
+
+	crawlv1alpha1 "gitea.home.hrajfrisbee.cz/kacerr/egress-proxies-operator/api/v1alpha1"
+)
+
+// Reasons used on the Provisioned condition, plus the two the reconciler
+// writes on the Healthy condition when representing the health engine's
+// verdict (the engine owns the state; only the reconciler writes status).
+const (
+	ReasonProvisioning     = "Provisioning"
+	ReasonCreated          = "Created"
+	ReasonReplacing        = "Replacing"
+	ReasonRecreating       = "Recreating"
+	ReasonQuotaExceeded    = "QuotaExceeded"
+	ReasonPermanentError   = "PermanentError"
+	ReasonCloudInitError   = "CloudInitError"
+	ReasonExternalEndpoint = "ExternalEndpoint"
+	ReasonDeleting         = "Deleting"
+
+	ReasonProbeSucceeded = "ProbeSucceeded"
+	ReasonProbeFailed    = "ProbeFailed"
+)
+
+// setProvisioned stages the Provisioned condition on p. Nothing is written
+// to the API server here; the deferred patch in Reconcile flushes it.
+// ObservedGeneration is passed explicitly — SetStatusCondition does not
+// populate it, and without it every condition would report generation 0.
+func setProvisioned(p *crawlv1alpha1.Proxy, status metav1.ConditionStatus, reason, message string) {
+	apimeta.SetStatusCondition(&p.Status.Conditions, metav1.Condition{
+		Type:               crawlv1alpha1.ConditionProvisioned,
+		Status:             status,
+		Reason:             reason,
+		Message:            message,
+		ObservedGeneration: p.Generation,
+	})
+}
+
+// applyHealth stages the Healthy condition and the latency fields from the
+// health engine's current snapshot. Called only from states where the proxy
+// is reachable (Running, External); everywhere else the condition is either
+// left as-is or removed by the create branch.
+func (r *ProxyReconciler) applyHealth(p *crawlv1alpha1.Proxy) {
+	if r.Health == nil {
+		return
+	}
+	snap, ok := r.Health.Snapshot(client.ObjectKeyFromObject(p))
+	if !ok {
+		return
+	}
+	cond := metav1.Condition{
+		Type:               crawlv1alpha1.ConditionHealthy,
+		ObservedGeneration: p.Generation,
+	}
+	if snap.Healthy {
+		cond.Status = metav1.ConditionTrue
+		cond.Reason = ReasonProbeSucceeded
+		cond.Message = "probe succeeded through the proxy"
+	} else {
+		cond.Status = metav1.ConditionFalse
+		cond.Reason = ReasonProbeFailed
+		cond.Message = fmt.Sprintf("%d consecutive probe failures; last: %s",
+			snap.ConsecutiveFailures, snap.LastError)
+	}
+	apimeta.SetStatusCondition(&p.Status.Conditions, cond)
+	p.Status.LatencyMillis = snap.Latency.Milliseconds()
+	if !snap.LastProbe.IsZero() {
+		p.Status.LastHealthCheckTime = &metav1.Time{Time: snap.LastProbe}
+	}
+}
+
+// computePhase derives status.phase from deletionTimestamp and the
+// Provisioned/Healthy conditions. Pure, so the truth table is unit-testable.
+func computePhase(p *crawlv1alpha1.Proxy) crawlv1alpha1.ProxyPhase {
+	if !p.DeletionTimestamp.IsZero() {
+		return crawlv1alpha1.PhaseDeleting
+	}
+	prov := apimeta.FindStatusCondition(p.Status.Conditions, crawlv1alpha1.ConditionProvisioned)
+	if prov == nil {
+		return crawlv1alpha1.PhasePending
+	}
+	if prov.Status != metav1.ConditionTrue {
+		// Quota exhaustion is a slow-retry wait, not a terminal state — only
+		// a permanent error latches Failed.
+		if prov.Reason == ReasonPermanentError {
+			return crawlv1alpha1.PhaseFailed
+		}
+		return crawlv1alpha1.PhaseProvisioning
+	}
+	healthy := apimeta.FindStatusCondition(p.Status.Conditions, crawlv1alpha1.ConditionHealthy)
+	switch {
+	case healthy == nil || healthy.Status == metav1.ConditionUnknown:
+		// Provisioned but no health verdict yet: still being brought into
+		// service.
+		return crawlv1alpha1.PhaseProvisioning
+	case healthy.Status == metav1.ConditionTrue:
+		return crawlv1alpha1.PhaseReady
+	default:
+		return crawlv1alpha1.PhaseUnhealthy
+	}
+}
+
+// patchStatusIfChanged recomputes the derived status fields and issues one
+// status patch — or none, when nothing changed. This is the only place the
+// reconciler writes status.
+func (r *ProxyReconciler) patchStatusIfChanged(ctx context.Context, base, p *crawlv1alpha1.Proxy) error {
+	p.Status.ObservedGeneration = p.Generation
+	p.Status.Phase = computePhase(p)
+	if equality.Semantic.DeepEqual(base.Status, p.Status) {
+		return nil
+	}
+	return r.Status().Patch(ctx, p, client.MergeFrom(base))
+}

internal/controller/status_test.go

@@ -0,0 +1,112 @@
+package controller
+
+import (
+	"testing"
+
+	metav1 "k8s.io/apimachinery/pkg/apis/meta/v1"
+
+	crawlv1alpha1 "gitea.home.hrajfrisbee.cz/kacerr/egress-proxies-operator/api/v1alpha1"
+)
+
+func TestComputePhase_truthTable(t *testing.T) {
+	t.Parallel()
+
+	cond := func(condType string, status metav1.ConditionStatus, reason string) metav1.Condition {
+		return metav1.Condition{Type: condType, Status: status, Reason: reason}
+	}
+
+	tests := []struct {
+		name       string
+		deleting   bool
+		conditions []metav1.Condition
+		want       crawlv1alpha1.ProxyPhase
+	}{
+		{
+			name:     "deletionTimestamp wins over everything",
+			deleting: true,
+			conditions: []metav1.Condition{
+				cond(crawlv1alpha1.ConditionProvisioned, metav1.ConditionTrue, ReasonCreated),
+				cond(crawlv1alpha1.ConditionHealthy, metav1.ConditionTrue, "Probing"),
+			},
+			want: crawlv1alpha1.PhaseDeleting,
+		},
+		{
+			name: "no conditions is Pending",
+			want: crawlv1alpha1.PhasePending,
+		},
+		{
+			name: "provisioning in progress",
+			conditions: []metav1.Condition{
+				cond(crawlv1alpha1.ConditionProvisioned, metav1.ConditionFalse, ReasonProvisioning),
+			},
+			want: crawlv1alpha1.PhaseProvisioning,
+		},
+		{
+			name: "replacing counts as provisioning",
+			conditions: []metav1.Condition{
+				cond(crawlv1alpha1.ConditionProvisioned, metav1.ConditionFalse, ReasonReplacing),
+			},
+			want: crawlv1alpha1.PhaseProvisioning,
+		},
+		{
+			name: "quota exhaustion is not Failed",
+			conditions: []metav1.Condition{
+				cond(crawlv1alpha1.ConditionProvisioned, metav1.ConditionFalse, ReasonQuotaExceeded),
+			},
+			want: crawlv1alpha1.PhaseProvisioning,
+		},
+		{
+			name: "permanent error is Failed",
+			conditions: []metav1.Condition{
+				cond(crawlv1alpha1.ConditionProvisioned, metav1.ConditionFalse, ReasonPermanentError),
+			},
+			want: crawlv1alpha1.PhaseFailed,
+		},
+		{
+			name: "provisioned without a health verdict stays Provisioning",
+			conditions: []metav1.Condition{
+				cond(crawlv1alpha1.ConditionProvisioned, metav1.ConditionTrue, ReasonCreated),
+			},
+			want: crawlv1alpha1.PhaseProvisioning,
+		},
+		{
+			name: "provisioned with Healthy Unknown stays Provisioning",
+			conditions: []metav1.Condition{
+				cond(crawlv1alpha1.ConditionProvisioned, metav1.ConditionTrue, ReasonCreated),
+				cond(crawlv1alpha1.ConditionHealthy, metav1.ConditionUnknown, "NoProbeYet"),
+			},
+			want: crawlv1alpha1.PhaseProvisioning,
+		},
+		{
+			name: "provisioned and healthy is Ready",
+			conditions: []metav1.Condition{
+				cond(crawlv1alpha1.ConditionProvisioned, metav1.ConditionTrue, ReasonCreated),
+				cond(crawlv1alpha1.ConditionHealthy, metav1.ConditionTrue, "Probing"),
+			},
+			want: crawlv1alpha1.PhaseReady,
+		},
+		{
+			name: "provisioned but unhealthy is Unhealthy",
+			conditions: []metav1.Condition{
+				cond(crawlv1alpha1.ConditionProvisioned, metav1.ConditionTrue, ReasonCreated),
+				cond(crawlv1alpha1.ConditionHealthy, metav1.ConditionFalse, "ProbeFailed"),
+			},
+			want: crawlv1alpha1.PhaseUnhealthy,
+		},
+	}
+
+	for _, tc := range tests {
+		t.Run(tc.name, func(t *testing.T) {
+			t.Parallel()
+			p := &crawlv1alpha1.Proxy{}
+			p.Status.Conditions = tc.conditions
+			if tc.deleting {
+				now := metav1.Now()
+				p.DeletionTimestamp = &now
+			}
+			if got := computePhase(p); got != tc.want {
+				t.Errorf("computePhase() = %s, want %s", got, tc.want)
+			}
+		})
+	}
+}

internal/controller/suite_test.go

@@ -49,6 +49,9 @@ var (
 )
 
 func TestControllers(t *testing.T) {
+	if testing.Short() {
+		t.Skip("skipping envtest suite in -short mode")
+	}
 	RegisterFailHandler(Fail)
 
 	RunSpecs(t, "Controller Suite")

internal/health/engine.go

@@ -0,0 +1,340 @@
+package health
+
+import (
+	"context"
+	"crypto/tls"
+	"math/rand/v2"
+	"net"
+	"net/url"
+	"strconv"
+	"sync"
+	"time"
+
+	apimeta "k8s.io/apimachinery/pkg/api/meta"
+	metav1 "k8s.io/apimachinery/pkg/apis/meta/v1"
+	"k8s.io/apimachinery/pkg/types"
+	"sigs.k8s.io/controller-runtime/pkg/client"
+	"sigs.k8s.io/controller-runtime/pkg/event"
+	logf "sigs.k8s.io/controller-runtime/pkg/log"
+
+	crawlv1alpha1 "gitea.home.hrajfrisbee.cz/kacerr/egress-proxies-operator/api/v1alpha1"
+)
+
+// Snapshot is the engine's current verdict for one proxy, read by the
+// reconciler when it represents health in the Proxy's status.
+type Snapshot struct {
+	Healthy bool
+	// Latency is the wall time of the most recent successful probe.
+	Latency time.Duration
+	// LastProbe is when the most recent probe (of either outcome) finished.
+	LastProbe time.Time
+	// LastError is the most recent probe failure; empty after a success.
+	LastError string
+	// ConsecutiveFailures is the current failure streak.
+	ConsecutiveFailures int32
+}
+
+// state is the engine's threshold bookkeeping for one proxy. The reported*
+// fields track what has been delivered over Events; they only advance when a
+// send succeeds, so a dropped event is retried after the next probe.
+type state struct {
+	uid      types.UID
+	inFlight bool
+	nextDue  time.Time
+
+	healthy    *bool // nil until a first verdict exists
+	consecOK   int32
+	consecFail int32
+	latency    time.Duration
+	lastProbe  time.Time
+	lastErr    string
+
+	reportedHealthy *bool
+	reportedLatency time.Duration
+	lastReport      time.Time
+}
+
+type probeJob struct {
+	key      types.NamespacedName
+	uid      types.UID
+	proxyURL *url.URL
+	hc       crawlv1alpha1.HealthCheckSpec
+	interval time.Duration
+}
+
+// Engine runs the probe scheduler and worker pool as a manager Runnable. It
+// never writes Proxy status itself — keeping the reconciler the single
+// status writer — and instead emits a GenericEvent per status-affecting
+// transition, which the reconciler consumes via source.Channel.
+type Engine struct {
+	// Reader lists Proxies from the manager's cache each tick.
+	Reader client.Reader
+	// Events carries one enqueue-request per status-affecting transition.
+	// Sends are non-blocking: a wedged reconciler must never stall probing.
+	Events chan event.GenericEvent
+
+	// Workers is the probe worker pool size (default 8).
+	Workers int
+	// Tick is the scheduler interval (default 1s). At tens of proxies a
+	// per-second list scan is free; a timer wheel would be unjustified.
+	Tick time.Duration
+	// MinReportInterval rate-limits latency-only status reports (default 60s).
+	MinReportInterval time.Duration
+	// LatencyFloor is the absolute change below which a latency move is
+	// never status-affecting (default 20ms), so a proxy jittering around a
+	// small latency doesn't write status forever.
+	LatencyFloor time.Duration
+	// ProbeTLSConfig overrides TLS verification for https probe URLs; nil
+	// means system roots. Needed for private CAs (and tests).
+	ProbeTLSConfig *tls.Config
+
+	probeFn func(context.Context, *url.URL, crawlv1alpha1.HealthCheckSpec, *tls.Config) probeResult
+
+	mu     sync.Mutex
+	states map[types.NamespacedName]*state
+}
+
+// NewEngine returns an Engine with a buffered Events channel, ready to be
+// handed to both mgr.Add and the reconciler (Health + HealthEvents fields).
+func NewEngine(reader client.Reader) *Engine {
+	e := &Engine{Reader: reader}
+	e.applyDefaults()
+	return e
+}
+
+func (e *Engine) applyDefaults() {
+	if e.Events == nil {
+		e.Events = make(chan event.GenericEvent, 64)
+	}
+	if e.Workers == 0 {
+		e.Workers = 8
+	}
+	if e.Tick == 0 {
+		e.Tick = time.Second
+	}
+	if e.MinReportInterval == 0 {
+		e.MinReportInterval = time.Minute
+	}
+	if e.LatencyFloor == 0 {
+		e.LatencyFloor = 20 * time.Millisecond
+	}
+	if e.probeFn == nil {
+		e.probeFn = probe
+	}
+	if e.states == nil {
+		e.states = map[types.NamespacedName]*state{}
+	}
+}
+
+// NeedLeaderElection makes the engine run only on the leader: probing from
+// every replica would multiply load on the proxies, and only the leader's
+// reconciler can represent the results anyway.
+func (e *Engine) NeedLeaderElection() bool { return true }
+
+// Start runs the scheduler tick loop and the worker pool until ctx ends.
+func (e *Engine) Start(ctx context.Context) error {
+	e.applyDefaults()
+	jobs := make(chan probeJob)
+	var wg sync.WaitGroup
+	for range e.Workers {
+		wg.Go(func() {
+			for {
+				select {
+				case <-ctx.Done():
+					return
+				case job := <-jobs:
+					res := e.probeFn(ctx, job.proxyURL, job.hc, e.ProbeTLSConfig)
+					e.record(job, res, time.Now())
+				}
+			}
+		})
+	}
+
+	ticker := time.NewTicker(e.Tick)
+	defer ticker.Stop()
+	for {
+		select {
+		case <-ctx.Done():
+			wg.Wait()
+			return nil
+		case now := <-ticker.C:
+			e.tick(ctx, now, jobs)
+		}
+	}
+}
+
+// tick lists proxies from the cache, refreshes the state map (create, seed,
+// prune, UID-mismatch reset), and hands due proxies to the worker pool.
+func (e *Engine) tick(ctx context.Context, now time.Time, jobs chan<- probeJob) {
+	var list crawlv1alpha1.ProxyList
+	if err := e.Reader.List(ctx, &list); err != nil {
+		logf.FromContext(ctx).Error(err, "health engine: listing proxies")
+		return
+	}
+
+	e.mu.Lock()
+	defer e.mu.Unlock()
+
+	probeable := make(map[types.NamespacedName]struct{}, len(list.Items))
+	for i := range list.Items {
+		p := &list.Items[i]
+		host := p.EffectiveHost()
+		if host == "" || !p.DeletionTimestamp.IsZero() {
+			// Not probeable (provisioning, being replaced, or deleting).
+			// Its state gets pruned below, so a replacement instance starts
+			// with fresh counters.
+			continue
+		}
+		key := client.ObjectKeyFromObject(p)
+		probeable[key] = struct{}{}
+
+		hc := p.HealthCheckOrDefault()
+		interval := time.Duration(hc.IntervalSeconds) * time.Second
+
+		st := e.states[key]
+		if st == nil || st.uid != p.UID {
+			// New proxy, or a delete+recreate under the same name — never
+			// inherit the old object's counters.
+			st = newState(p, now, interval)
+			e.states[key] = st
+		}
+		if st.inFlight || now.Before(st.nextDue) {
+			continue
+		}
+		job := probeJob{
+			key:      key,
+			uid:      p.UID,
+			proxyURL: &url.URL{Scheme: "http", Host: net.JoinHostPort(host, strconv.Itoa(int(p.EffectivePort())))},
+			hc:       hc,
+			interval: interval,
+		}
+		select {
+		case jobs <- job:
+			st.inFlight = true
+		default:
+			// Worker pool saturated; the proxy stays due and is retried on
+			// the next tick.
+		}
+	}
+
+	for key := range e.states {
+		if _, ok := probeable[key]; !ok {
+			delete(e.states, key)
+		}
+	}
+}
+
+// newState seeds bookkeeping for a proxy the engine hasn't tracked yet. If
+// the CR already carries a Healthy verdict (leader handover, operator
+// restart), the verdict is kept — so a healthy proxy doesn't flap to
+// unknown — counters stay at zero so a real transition still needs a full
+// threshold run, and the first probe is jittered across the interval so a
+// restart doesn't fire the whole fleet's probes at once. A proxy with no
+// prior verdict is probed immediately.
+func newState(p *crawlv1alpha1.Proxy, now time.Time, interval time.Duration) *state {
+	st := &state{uid: p.UID, nextDue: now}
+	cond := apimeta.FindStatusCondition(p.Status.Conditions, crawlv1alpha1.ConditionHealthy)
+	if cond == nil || cond.Status == metav1.ConditionUnknown {
+		return st
+	}
+	healthy := cond.Status == metav1.ConditionTrue
+	reported := healthy
+	st.healthy = &healthy
+	st.reportedHealthy = &reported
+	st.latency = time.Duration(p.Status.LatencyMillis) * time.Millisecond
+	st.reportedLatency = st.latency
+	st.nextDue = now.Add(rand.N(interval))
+	return st
+}
+
+// record folds one probe result into the proxy's threshold state and emits
+// an event when the result is status-affecting: a first-ever verdict, a
+// threshold-crossing flip, or a material latency change (beyond
+// max(LatencyFloor, 50% of reported) and rate-limited by MinReportInterval).
+func (e *Engine) record(job probeJob, res probeResult, now time.Time) {
+	e.mu.Lock()
+	defer e.mu.Unlock()
+
+	st := e.states[job.key]
+	if st == nil || st.uid != job.uid {
+		return // pruned or replaced while the probe was in flight
+	}
+	st.inFlight = false
+	st.nextDue = now.Add(job.interval)
+	st.lastProbe = now
+
+	if res.ok {
+		st.consecOK++
+		st.consecFail = 0
+		st.latency = res.latency
+		st.lastErr = ""
+	} else {
+		st.consecFail++
+		st.consecOK = 0
+		st.lastErr = res.err.Error()
+	}
+
+	switch {
+	case st.healthy == nil:
+		healthy := res.ok
+		st.healthy = &healthy
+	case *st.healthy && st.consecFail >= job.hc.FailureThreshold:
+		healthy := false
+		st.healthy = &healthy
+	case !*st.healthy && st.consecOK >= job.hc.SuccessThreshold:
+		healthy := true
+		st.healthy = &healthy
+	}
+
+	var emit bool
+	switch {
+	case st.reportedHealthy == nil:
+		emit = true
+	case *st.reportedHealthy != *st.healthy:
+		emit = true
+	case res.ok && *st.healthy:
+		// Latency-only updates matter only for a healthy verdict; a success
+		// streak still below successThreshold must stay silent.
+		delta := st.latency - st.reportedLatency
+		if delta < 0 {
+			delta = -delta
+		}
+		emit = delta > max(e.LatencyFloor, st.reportedLatency/2) &&
+			now.Sub(st.lastReport) > e.MinReportInterval
+	}
+	if !emit {
+		return
+	}
+
+	evt := event.GenericEvent{Object: &crawlv1alpha1.Proxy{
+		ObjectMeta: metav1.ObjectMeta{Namespace: job.key.Namespace, Name: job.key.Name},
+	}}
+	select {
+	case e.Events <- evt:
+		reported := *st.healthy
+		st.reportedHealthy = &reported
+		st.reportedLatency = st.latency
+		st.lastReport = now
+	default:
+		// Channel full (reconciler wedged): drop, and deliberately do not
+		// advance the reported markers, so the next probe retries the emit.
+	}
+}
+
+// Snapshot returns the engine's current verdict for key; ok is false while
+// no verdict exists (never probed, or state was reset).
+func (e *Engine) Snapshot(key types.NamespacedName) (Snapshot, bool) {
+	e.mu.Lock()
+	defer e.mu.Unlock()
+	st := e.states[key]
+	if st == nil || st.healthy == nil {
+		return Snapshot{}, false
+	}
+	return Snapshot{
+		Healthy:             *st.healthy,
+		Latency:             st.latency,
+		LastProbe:           st.lastProbe,
+		LastError:           st.lastErr,
+		ConsecutiveFailures: st.consecFail,
+	}, true
+}

internal/health/engine_test.go

@@ -0,0 +1,372 @@
+package health
+
+import (
+	"context"
+	"crypto/tls"
+	"errors"
+	"net/url"
+	"strconv"
+	"strings"
+	"testing"
+	"time"
+
+	metav1 "k8s.io/apimachinery/pkg/apis/meta/v1"
+	"k8s.io/apimachinery/pkg/runtime"
+	"k8s.io/apimachinery/pkg/types"
+	"sigs.k8s.io/controller-runtime/pkg/client/fake"
+	"sigs.k8s.io/controller-runtime/pkg/event"
+
+	crawlv1alpha1 "gitea.home.hrajfrisbee.cz/kacerr/egress-proxies-operator/api/v1alpha1"
+)
+
+var testKey = types.NamespacedName{Namespace: "default", Name: "p1"}
+
+func testEngine() *Engine {
+	e := &Engine{Events: make(chan event.GenericEvent, 8)}
+	e.applyDefaults()
+	return e
+}
+
+func testJob(failureThreshold, successThreshold int32) probeJob {
+	return probeJob{
+		key: testKey,
+		uid: "uid-1",
+		hc: crawlv1alpha1.HealthCheckSpec{
+			FailureThreshold: failureThreshold,
+			SuccessThreshold: successThreshold,
+		},
+		interval: 30 * time.Second,
+	}
+}
+
+func drainOneEvent(t *testing.T, e *Engine) event.GenericEvent {
+	t.Helper()
+	select {
+	case evt := <-e.Events:
+		return evt
+	default:
+		t.Fatal("expected an event, channel is empty")
+		return event.GenericEvent{}
+	}
+}
+
+func assertNoEvent(t *testing.T, e *Engine) {
+	t.Helper()
+	select {
+	case <-e.Events:
+		t.Fatal("unexpected event emitted")
+	default:
+	}
+}
+
+func boolPtr(b bool) *bool { return &b }
+
+func TestRecord_firstResultEmits(t *testing.T) {
+	t.Parallel()
+	e := testEngine()
+	e.states[testKey] = &state{uid: "uid-1"}
+
+	e.record(testJob(3, 1), probeResult{ok: true, latency: 30 * time.Millisecond}, time.Now())
+
+	evt := drainOneEvent(t, e)
+	if got := evt.Object.GetName(); got != "p1" {
+		t.Errorf("event object name = %q, want p1", got)
+	}
+	snap, ok := e.Snapshot(testKey)
+	if !ok || !snap.Healthy {
+		t.Errorf("Snapshot = %+v, %v; want healthy verdict", snap, ok)
+	}
+	if snap.Latency != 30*time.Millisecond {
+		t.Errorf("latency = %v, want 30ms", snap.Latency)
+	}
+}
+
+func TestRecord_failureThresholdFlips(t *testing.T) {
+	t.Parallel()
+	e := testEngine()
+	e.states[testKey] = &state{uid: "uid-1", healthy: boolPtr(true), reportedHealthy: boolPtr(true)}
+	job := testJob(3, 1)
+	probeErr := probeResult{err: errors.New("connect refused")}
+
+	e.record(job, probeErr, time.Now())
+	e.record(job, probeErr, time.Now())
+	assertNoEvent(t, e)
+	if snap, _ := e.Snapshot(testKey); !snap.Healthy {
+		t.Fatal("flipped unhealthy before failureThreshold was reached")
+	}
+
+	e.record(job, probeErr, time.Now())
+	drainOneEvent(t, e)
+	snap, _ := e.Snapshot(testKey)
+	if snap.Healthy {
+		t.Error("still healthy after failureThreshold consecutive failures")
+	}
+	if snap.ConsecutiveFailures != 3 {
+		t.Errorf("ConsecutiveFailures = %d, want 3", snap.ConsecutiveFailures)
+	}
+	if !strings.Contains(snap.LastError, "connect refused") {
+		t.Errorf("LastError = %q, want the probe error", snap.LastError)
+	}
+}
+
+func TestRecord_successThresholdFlips(t *testing.T) {
+	t.Parallel()
+	e := testEngine()
+	e.states[testKey] = &state{uid: "uid-1", healthy: boolPtr(false), reportedHealthy: boolPtr(false)}
+	job := testJob(3, 2)
+	success := probeResult{ok: true, latency: 25 * time.Millisecond}
+
+	e.record(job, success, time.Now())
+	assertNoEvent(t, e)
+
+	e.record(job, success, time.Now())
+	drainOneEvent(t, e)
+	if snap, _ := e.Snapshot(testKey); !snap.Healthy {
+		t.Error("not healthy after successThreshold consecutive successes")
+	}
+}
+
+func TestRecord_latencySuppression(t *testing.T) {
+	t.Parallel()
+	now := time.Now()
+
+	tests := []struct {
+		name            string
+		reportedLatency time.Duration
+		lastReport      time.Time
+		newLatency      time.Duration
+		wantEmit        bool
+	}{
+		{
+			name:            "small change under the relative floor is suppressed",
+			reportedLatency: 100 * time.Millisecond,
+			lastReport:      now.Add(-2 * time.Minute),
+			newLatency:      110 * time.Millisecond,
+			wantEmit:        false,
+		},
+		{
+			name:            "small absolute jitter at low latency is suppressed",
+			reportedLatency: 5 * time.Millisecond,
+			lastReport:      now.Add(-2 * time.Minute),
+			newLatency:      20 * time.Millisecond, // >50% but under the 20ms floor
+			wantEmit:        false,
+		},
+		{
+			name:            "material change after the rate window emits",
+			reportedLatency: 100 * time.Millisecond,
+			lastReport:      now.Add(-2 * time.Minute),
+			newLatency:      200 * time.Millisecond,
+			wantEmit:        true,
+		},
+		{
+			name:            "material change inside the rate window is suppressed",
+			reportedLatency: 100 * time.Millisecond,
+			lastReport:      now.Add(-10 * time.Second),
+			newLatency:      400 * time.Millisecond,
+			wantEmit:        false,
+		},
+	}
+
+	for _, tc := range tests {
+		t.Run(tc.name, func(t *testing.T) {
+			t.Parallel()
+			e := testEngine()
+			e.states[testKey] = &state{
+				uid:             "uid-1",
+				healthy:         boolPtr(true),
+				reportedHealthy: boolPtr(true),
+				reportedLatency: tc.reportedLatency,
+				lastReport:      tc.lastReport,
+			}
+			e.record(testJob(3, 1), probeResult{ok: true, latency: tc.newLatency}, now)
+			if tc.wantEmit {
+				drainOneEvent(t, e)
+			} else {
+				assertNoEvent(t, e)
+			}
+		})
+	}
+}
+
+func TestRecord_droppedEventIsRetried(t *testing.T) {
+	t.Parallel()
+	e := testEngine()
+	e.Events = make(chan event.GenericEvent) // unbuffered, nobody reading
+	e.states[testKey] = &state{uid: "uid-1"}
+	success := probeResult{ok: true, latency: 30 * time.Millisecond}
+
+	e.record(testJob(3, 1), success, time.Now())
+	e.mu.Lock()
+	reported := e.states[testKey].reportedHealthy
+	e.mu.Unlock()
+	if reported != nil {
+		t.Fatal("reported marker advanced although the event was dropped")
+	}
+
+	// Channel drains (reconciler recovers): the next probe re-emits.
+	e.Events = make(chan event.GenericEvent, 1)
+	e.record(testJob(3, 1), success, time.Now())
+	drainOneEvent(t, e)
+}
+
+func TestRecord_staleJobIsIgnored(t *testing.T) {
+	t.Parallel()
+	e := testEngine()
+	e.states[testKey] = &state{uid: "uid-NEW"}
+
+	job := testJob(3, 1)
+	job.uid = "uid-OLD"
+	e.record(job, probeResult{ok: true, latency: time.Millisecond}, time.Now())
+
+	assertNoEvent(t, e)
+	if _, ok := e.Snapshot(testKey); ok {
+		t.Error("stale probe produced a verdict for the new object")
+	}
+}
+
+func externalProxy(name, host string, mut ...func(*crawlv1alpha1.Proxy)) *crawlv1alpha1.Proxy {
+	p := &crawlv1alpha1.Proxy{
+		ObjectMeta: metav1.ObjectMeta{
+			Name: name, Namespace: "default", UID: types.UID("uid-" + name),
+		},
+		Spec: crawlv1alpha1.ProxySpec{
+			Mode:     crawlv1alpha1.ModeExternal,
+			Endpoint: &crawlv1alpha1.EndpointSpec{Host: host, Port: 3128},
+		},
+	}
+	for _, m := range mut {
+		m(p)
+	}
+	return p
+}
+
+func TestTick_schedulingAndPruning(t *testing.T) {
+	t.Parallel()
+	s := runtime.NewScheme()
+	if err := crawlv1alpha1.AddToScheme(s); err != nil {
+		t.Fatalf("scheme: %v", err)
+	}
+
+	probeable := externalProxy("probeable", "10.0.0.1")
+	seeded := externalProxy("seeded", "10.0.0.2", func(p *crawlv1alpha1.Proxy) {
+		p.Status.Conditions = []metav1.Condition{{
+			Type: crawlv1alpha1.ConditionHealthy, Status: metav1.ConditionTrue,
+			Reason: "ProbeSucceeded", LastTransitionTime: metav1.Now(),
+		}}
+		p.Status.LatencyMillis = 42
+	})
+	noIP := &crawlv1alpha1.Proxy{
+		ObjectMeta: metav1.ObjectMeta{Name: "no-ip", Namespace: "default", UID: "uid-no-ip"},
+		Spec:       crawlv1alpha1.ProxySpec{Mode: crawlv1alpha1.ModeManaged, Provider: "stub"},
+	}
+
+	e := testEngine()
+	e.Reader = fake.NewClientBuilder().WithScheme(s).
+		WithObjects(probeable, seeded, noIP).Build()
+	// Stale entries: one for a proxy that no longer exists, one under a key
+	// that now belongs to a different UID (delete + recreate).
+	e.states[types.NamespacedName{Namespace: "default", Name: "gone"}] = &state{uid: "uid-gone"}
+	e.states[types.NamespacedName{Namespace: "default", Name: "probeable"}] = &state{
+		uid: "uid-previous-incarnation", healthy: boolPtr(false),
+	}
+
+	jobs := make(chan probeJob, 8)
+	e.tick(context.Background(), time.Now(), jobs)
+
+	var dispatched []probeJob
+	for {
+		select {
+		case j := <-jobs:
+			dispatched = append(dispatched, j)
+			continue
+		default:
+		}
+		break
+	}
+
+	if len(dispatched) != 1 {
+		t.Fatalf("dispatched %d jobs, want exactly 1 (only the fresh probeable proxy)", len(dispatched))
+	}
+	j := dispatched[0]
+	if j.key.Name != "probeable" || j.uid != "uid-probeable" {
+		t.Errorf("dispatched job = %+v, want the recreated probeable proxy", j)
+	}
+	if want := "http://" + "10.0.0.1:" + strconv.Itoa(3128); j.proxyURL.String() != want {
+		t.Errorf("proxyURL = %s, want %s", j.proxyURL, want)
+	}
+
+	e.mu.Lock()
+	defer e.mu.Unlock()
+	if _, ok := e.states[types.NamespacedName{Namespace: "default", Name: "gone"}]; ok {
+		t.Error("state for a deleted proxy was not pruned")
+	}
+	if _, ok := e.states[types.NamespacedName{Namespace: "default", Name: "no-ip"}]; ok {
+		t.Error("state was created for a proxy with no IP")
+	}
+	st := e.states[types.NamespacedName{Namespace: "default", Name: "probeable"}]
+	if st == nil || st.uid != "uid-probeable" {
+		t.Fatalf("state for recreated proxy = %+v, want fresh state with the new UID", st)
+	}
+	if st.healthy != nil && !*st.healthy {
+		t.Error("recreated proxy inherited the previous incarnation's unhealthy verdict")
+	}
+	seededSt := e.states[types.NamespacedName{Namespace: "default", Name: "seeded"}]
+	if seededSt == nil {
+		t.Fatal("no state created for the seeded proxy")
+	}
+	if seededSt.healthy == nil || !*seededSt.healthy {
+		t.Error("seeded proxy did not inherit its Healthy condition")
+	}
+	if seededSt.reportedHealthy == nil || !*seededSt.reportedHealthy {
+		t.Error("seeded verdict must count as already reported, or restart would re-emit for the whole fleet")
+	}
+	if seededSt.reportedLatency != 42*time.Millisecond {
+		t.Errorf("seeded reportedLatency = %v, want 42ms", seededSt.reportedLatency)
+	}
+	if seededSt.consecOK != 0 || seededSt.consecFail != 0 {
+		t.Error("seeded counters must start at zero")
+	}
+}
+
+func TestEngine_StartEndToEnd(t *testing.T) {
+	t.Parallel()
+	s := runtime.NewScheme()
+	if err := crawlv1alpha1.AddToScheme(s); err != nil {
+		t.Fatalf("scheme: %v", err)
+	}
+
+	e := testEngine()
+	e.Tick = 5 * time.Millisecond
+	e.Reader = fake.NewClientBuilder().WithScheme(s).
+		WithObjects(externalProxy("p1", "192.0.2.1")).Build()
+	e.probeFn = func(context.Context, *url.URL, crawlv1alpha1.HealthCheckSpec, *tls.Config) probeResult {
+		return probeResult{ok: true, latency: 12 * time.Millisecond}
+	}
+
+	ctx, cancel := context.WithCancel(context.Background())
+	done := make(chan error, 1)
+	go func() { done <- e.Start(ctx) }()
+
+	select {
+	case evt := <-e.Events:
+		if evt.Object.GetName() != "p1" {
+			t.Errorf("event for %q, want p1", evt.Object.GetName())
+		}
+	case <-time.After(5 * time.Second):
+		t.Fatal("no health event within 5s")
+	}
+	snap, ok := e.Snapshot(types.NamespacedName{Namespace: "default", Name: "p1"})
+	if !ok || !snap.Healthy || snap.Latency != 12*time.Millisecond {
+		t.Errorf("Snapshot = %+v, %v; want healthy at 12ms", snap, ok)
+	}
+
+	cancel()
+	select {
+	case err := <-done:
+		if err != nil {
+			t.Errorf("Start returned %v, want nil on context cancel", err)
+		}
+	case <-time.After(5 * time.Second):
+		t.Fatal("Start did not stop within 5s of cancel")
+	}
+}

internal/health/probe.go

@@ -0,0 +1,66 @@
+// Package health actively probes every proxy by fetching a URL through the
+// proxy itself, keeps per-proxy threshold state, and pushes status-affecting
+// transitions to the reconciler over a channel. The engine owns health
+// state; the reconciler owns its representation in the Proxy's status.
+package health
+
+import (
+	"context"
+	"crypto/tls"
+	"fmt"
+	"net"
+	"net/http"
+	"net/url"
+	"slices"
+	"time"
+
+	crawlv1alpha1 "gitea.home.hrajfrisbee.cz/kacerr/egress-proxies-operator/api/v1alpha1"
+)
+
+// probeResult is the outcome of a single through-the-proxy probe.
+type probeResult struct {
+	ok      bool
+	latency time.Duration
+	err     error
+}
+
+// probe fetches hc.ProbeURL through the proxy at proxyURL. For an https
+// probe URL the transport issues CONNECT to the proxy and TLS-handshakes
+// through the tunnel; a proxy that accepts TCP but cannot egress answers
+// CONNECT with a non-200, which client.Do surfaces as an error, not a
+// response — so success requires err == nil AND an expected status code.
+// tlsCfg is nil in production (system roots); tests and private-CA setups
+// inject their own.
+func probe(ctx context.Context, proxyURL *url.URL, hc crawlv1alpha1.HealthCheckSpec, tlsCfg *tls.Config) probeResult {
+	timeout := time.Duration(hc.TimeoutSeconds) * time.Second
+	transport := &http.Transport{
+		Proxy: http.ProxyURL(proxyURL),
+		// Load-bearing: with keep-alives on, net/http caches the established
+		// CONNECT tunnel and later probes would never re-exercise CONNECT —
+		// exactly the failure this probe exists to catch.
+		DisableKeepAlives:     true,
+		ForceAttemptHTTP2:     false,
+		TLSHandshakeTimeout:   timeout,
+		ResponseHeaderTimeout: timeout,
+		TLSClientConfig:       tlsCfg,
+		DialContext:           (&net.Dialer{Timeout: timeout}).DialContext,
+	}
+	defer transport.CloseIdleConnections()
+
+	client := &http.Client{Transport: transport, Timeout: timeout}
+	req, err := http.NewRequestWithContext(ctx, http.MethodGet, hc.ProbeURL, nil)
+	if err != nil {
+		return probeResult{err: fmt.Errorf("building probe request: %w", err)}
+	}
+	start := time.Now()
+	resp, err := client.Do(req)
+	latency := time.Since(start)
+	if err != nil {
+		return probeResult{latency: latency, err: err}
+	}
+	defer func() { _ = resp.Body.Close() }()
+	if !slices.Contains(hc.ExpectedStatusCodes, int32(resp.StatusCode)) {
+		return probeResult{latency: latency, err: fmt.Errorf("unexpected status %d", resp.StatusCode)}
+	}
+	return probeResult{ok: true, latency: latency}
+}

internal/health/probe_test.go

@@ -0,0 +1,169 @@
+package health
+
+import (
+	"context"
+	"crypto/tls"
+	"crypto/x509"
+	"io"
+	"net"
+	"net/http"
+	"net/http/httptest"
+	"net/url"
+	"testing"
+	"time"
+
+	crawlv1alpha1 "gitea.home.hrajfrisbee.cz/kacerr/egress-proxies-operator/api/v1alpha1"
+)
+
+// startConnectProxy runs a minimal but real HTTP proxy: CONNECT tunneling
+// for https targets, absolute-URI forwarding for plain http ones. With
+// refuseConnect it answers CONNECT with 502 — the "accepts TCP but cannot
+// egress" failure mode the probe must classify as unhealthy.
+func startConnectProxy(t *testing.T, refuseConnect bool) *httptest.Server {
+	t.Helper()
+	srv := httptest.NewServer(http.HandlerFunc(func(w http.ResponseWriter, r *http.Request) {
+		if r.Method == http.MethodConnect {
+			if refuseConnect {
+				http.Error(w, "no egress", http.StatusBadGateway)
+				return
+			}
+			dst, err := net.DialTimeout("tcp", r.Host, time.Second)
+			if err != nil {
+				http.Error(w, err.Error(), http.StatusBadGateway)
+				return
+			}
+			conn, bufrw, err := http.NewResponseController(w).Hijack()
+			if err != nil {
+				_ = dst.Close()
+				t.Errorf("hijack: %v", err)
+				return
+			}
+			_, _ = bufrw.WriteString("HTTP/1.1 200 Connection established\r\n\r\n")
+			_ = bufrw.Flush()
+			done := make(chan struct{}, 2)
+			go func() { _, _ = io.Copy(dst, bufrw); done <- struct{}{} }()
+			go func() { _, _ = io.Copy(conn, dst); done <- struct{}{} }()
+			<-done
+			_ = conn.Close()
+			_ = dst.Close()
+			return
+		}
+		out := r.Clone(r.Context())
+		out.RequestURI = ""
+		resp, err := http.DefaultTransport.RoundTrip(out)
+		if err != nil {
+			http.Error(w, err.Error(), http.StatusBadGateway)
+			return
+		}
+		defer func() { _ = resp.Body.Close() }()
+		for k, vv := range resp.Header {
+			for _, v := range vv {
+				w.Header().Add(k, v)
+			}
+		}
+		w.WriteHeader(resp.StatusCode)
+		_, _ = io.Copy(w, resp.Body)
+	}))
+	t.Cleanup(srv.Close)
+	return srv
+}
+
+func startTLSTarget(t *testing.T, status int) (*httptest.Server, *tls.Config) {
+	t.Helper()
+	target := httptest.NewTLSServer(http.HandlerFunc(func(w http.ResponseWriter, _ *http.Request) {
+		w.WriteHeader(status)
+	}))
+	t.Cleanup(target.Close)
+	pool := x509.NewCertPool()
+	pool.AddCert(target.Certificate())
+	return target, &tls.Config{RootCAs: pool}
+}
+
+func proxyURL(t *testing.T, srv *httptest.Server) *url.URL {
+	t.Helper()
+	u, err := url.Parse(srv.URL)
+	if err != nil {
+		t.Fatalf("parsing proxy URL: %v", err)
+	}
+	return u
+}
+
+func testHC(probeTarget string) crawlv1alpha1.HealthCheckSpec {
+	return crawlv1alpha1.HealthCheckSpec{
+		ProbeURL:            probeTarget,
+		IntervalSeconds:     30,
+		TimeoutSeconds:      5,
+		FailureThreshold:    3,
+		SuccessThreshold:    1,
+		ExpectedStatusCodes: []int32{200, 204},
+	}
+}
+
+func TestProbe_connectTunnelSucceeds(t *testing.T) {
+	t.Parallel()
+	target, tlsCfg := startTLSTarget(t, http.StatusNoContent)
+	proxy := startConnectProxy(t, false)
+
+	res := probe(context.Background(), proxyURL(t, proxy), testHC(target.URL), tlsCfg)
+	if !res.ok {
+		t.Fatalf("probe failed through working proxy: %v", res.err)
+	}
+	if res.latency <= 0 {
+		t.Errorf("latency = %v, want > 0", res.latency)
+	}
+}
+
+func TestProbe_refusedConnectFails(t *testing.T) {
+	t.Parallel()
+	target, tlsCfg := startTLSTarget(t, http.StatusNoContent)
+	proxy := startConnectProxy(t, true)
+
+	res := probe(context.Background(), proxyURL(t, proxy), testHC(target.URL), tlsCfg)
+	if res.ok {
+		t.Fatal("probe succeeded through a proxy that refuses CONNECT")
+	}
+	if res.err == nil {
+		t.Error("expected an error from the refused CONNECT")
+	}
+}
+
+func TestProbe_unexpectedStatusFails(t *testing.T) {
+	t.Parallel()
+	target, tlsCfg := startTLSTarget(t, http.StatusInternalServerError)
+	proxy := startConnectProxy(t, false)
+
+	res := probe(context.Background(), proxyURL(t, proxy), testHC(target.URL), tlsCfg)
+	if res.ok {
+		t.Fatal("probe succeeded on a 500 response")
+	}
+}
+
+func TestProbe_unreachableProxyFails(t *testing.T) {
+	t.Parallel()
+	// A listener that is immediately closed: guaranteed-refused port.
+	l, err := net.Listen("tcp", "127.0.0.1:0")
+	if err != nil {
+		t.Fatalf("reserving port: %v", err)
+	}
+	dead := &url.URL{Scheme: "http", Host: l.Addr().String()}
+	_ = l.Close()
+
+	res := probe(context.Background(), dead, testHC("https://example.invalid/"), nil)
+	if res.ok {
+		t.Fatal("probe succeeded against a dead proxy")
+	}
+}
+
+func TestProbe_plainHTTPForwardSucceeds(t *testing.T) {
+	t.Parallel()
+	target := httptest.NewServer(http.HandlerFunc(func(w http.ResponseWriter, _ *http.Request) {
+		w.WriteHeader(http.StatusNoContent)
+	}))
+	t.Cleanup(target.Close)
+	proxy := startConnectProxy(t, false)
+
+	res := probe(context.Background(), proxyURL(t, proxy), testHC(target.URL), nil)
+	if !res.ok {
+		t.Fatalf("plain-http probe failed: %v", res.err)
+	}
+}

internal/provider/config.go

@@ -7,23 +7,6 @@ import (
 	"sigs.k8s.io/yaml"
 )
 
-// Fail-with classes accepted by MockConfig.FailWith, shared with the mock
-// provider's fault injection so the two sides never drift on the string
-// values.
-const (
-	FailWithNotFound  = "notfound"
-	FailWithQuota     = "quota"
-	FailWithTransient = "transient"
-	FailWithPermanent = "permanent"
-)
-
-var validFailClasses = map[string]bool{
-	FailWithNotFound:  true,
-	FailWithQuota:     true,
-	FailWithTransient: true,
-	FailWithPermanent: true,
-}
-
 // Config is the top-level shape of the --providers-config file.
 type Config struct {
 	Providers []ProviderConfig `json:"providers"`
@@ -36,25 +19,15 @@ type Config struct {
 type ProviderConfig struct {
 	Name       string            `json:"name"`
 	Type       string            `json:"type"`
-	Mock *MockConfig `json:"mock,omitempty"`
+	Kubernetes *KubernetesConfig `json:"kubernetes,omitempty"`
 	GCP        *GCPConfig        `json:"gcp,omitempty"`
 }
 
-// MockConfig configures the in-memory mock provider.
-type MockConfig struct {
-	// ProvisionDelaySeconds is how long a created instance reports
-	// Provisioning before Running. Default 5.
-	ProvisionDelaySeconds int32 `json:"provisionDelaySeconds,omitempty"`
-	// DeleteDelaySeconds is how long a deleted instance reports Terminated
-	// before Get starts returning ErrNotFound. Default 1.
-	DeleteDelaySeconds int32 `json:"deleteDelaySeconds,omitempty"`
-	// FailNextCreates makes the next N Create calls fail with FailWith,
-	// for exercising the reconciler's error handling in demos.
-	FailNextCreates int `json:"failNextCreates,omitempty"`
-	// FailWith selects the error class injected failures return: one of
-	// FailWithNotFound/FailWithQuota/FailWithTransient/FailWithPermanent.
-	// Default FailWithTransient.
-	FailWith string `json:"failWith,omitempty"`
+// KubernetesConfig configures the kubernetes-pod provider, which creates
+// proxy Pods in the same cluster the operator itself runs in.
+type KubernetesConfig struct {
+	// Image is the proxy container image. Default "ubuntu/squid:6.6-24.04_edge".
+	Image string `json:"image,omitempty"`
 }
 
 // GCPConfig configures a named GCP provider instance.
@@ -109,16 +82,13 @@ func (c *Config) validate() error {
 		seen[p.Name] = true
 
 		switch p.Type {
-		case "mock":
+		case "kubernetes":
 			if p.GCP != nil {
-				return fmt.Errorf("providers[%d] %q: type is mock but a gcp block is set", i, p.Name)
-			}
-			if p.Mock != nil && p.Mock.FailWith != "" && !validFailClasses[p.Mock.FailWith] {
-				return fmt.Errorf("providers[%d] %q: unknown mock.failWith %q", i, p.Name, p.Mock.FailWith)
+				return fmt.Errorf("providers[%d] %q: type is kubernetes but a gcp block is set", i, p.Name)
 			}
 		case "gcp":
-			if p.Mock != nil {
-				return fmt.Errorf("providers[%d] %q: type is gcp but a mock block is set", i, p.Name)
+			if p.Kubernetes != nil {
+				return fmt.Errorf("providers[%d] %q: type is gcp but a kubernetes block is set", i, p.Name)
 			}
 			if p.GCP == nil || p.GCP.Project == "" {
 				return fmt.Errorf("providers[%d] %q: gcp.project is required", i, p.Name)

internal/provider/config_test.go

@@ -9,10 +9,10 @@ func TestLoadConfig_valid(t *testing.T) {
 	t.Parallel()
 	data := []byte(`
 providers:
-  - name: mock
-    type: mock
-    mock:
-      provisionDelaySeconds: 2
+  - name: kubernetes
+    type: kubernetes
+    kubernetes:
+      image: ubuntu/squid:6.6-24.04_edge
   - name: gcp-eu
     type: gcp
     gcp:
@@ -26,8 +26,8 @@ providers:
 	if len(cfg.Providers) != 2 {
 		t.Fatalf("len(cfg.Providers) = %d, want 2", len(cfg.Providers))
 	}
-	if cfg.Providers[0].Mock == nil || cfg.Providers[0].Mock.ProvisionDelaySeconds != 2 {
-		t.Errorf("providers[0].mock = %+v, want ProvisionDelaySeconds=2", cfg.Providers[0].Mock)
+	if cfg.Providers[0].Kubernetes == nil || cfg.Providers[0].Kubernetes.Image != "ubuntu/squid:6.6-24.04_edge" {
+		t.Errorf("providers[0].kubernetes = %+v, want Image=ubuntu/squid:6.6-24.04_edge", cfg.Providers[0].Kubernetes)
 	}
 	if cfg.Providers[1].GCP == nil || cfg.Providers[1].GCP.Project != "my-project" {
 		t.Errorf("providers[1].gcp = %+v, want Project=my-project", cfg.Providers[1].GCP)
@@ -50,17 +50,17 @@ func TestLoadConfig_invalid(t *testing.T) {
 			name: "missing name",
 			yaml: `
 providers:
-  - type: mock`,
+  - type: kubernetes`,
 			wantErrSub: "name is required",
 		},
 		{
 			name: "duplicate name",
 			yaml: `
 providers:
-  - name: mock
-    type: mock
-  - name: mock
-    type: mock`,
+  - name: kubernetes
+    type: kubernetes
+  - name: kubernetes
+    type: kubernetes`,
 			wantErrSub: "duplicate provider name",
 		},
 		{
@@ -97,43 +97,33 @@ providers:
 			wantErrSub: "gcp.project is required",
 		},
 		{
-			name: "mock type with gcp block",
+			name: "kubernetes type with gcp block",
 			yaml: `
 providers:
   - name: p1
-    type: mock
+    type: kubernetes
     gcp:
       project: my-project`,
-			wantErrSub: "type is mock but a gcp block is set",
+			wantErrSub: "type is kubernetes but a gcp block is set",
 		},
 		{
-			name: "gcp type with mock block",
+			name: "gcp type with kubernetes block",
 			yaml: `
 providers:
   - name: p1
     type: gcp
     gcp:
       project: my-project
-    mock:
-      failNextCreates: 1`,
-			wantErrSub: "type is gcp but a mock block is set",
-		},
-		{
-			name: "unknown mock.failWith",
-			yaml: `
-providers:
-  - name: p1
-    type: mock
-    mock:
-      failWith: oops`,
-			wantErrSub: `unknown mock.failWith "oops"`,
+    kubernetes:
+      image: custom-image`,
+			wantErrSub: "type is gcp but a kubernetes block is set",
 		},
 		{
 			name: "strict mode rejects unknown top-level key",
 			yaml: `
 providers:
   - name: p1
-    type: mock
+    type: kubernetes
 extraneous: true`,
 			wantErrSub: "parsing providers config",
 		},
@@ -142,7 +132,7 @@ extraneous: true`,
 			yaml: `
 providers:
   - name: p1
-    type: mock
+    type: kubernetes
     bogus: true`,
 			wantErrSub: "parsing providers config",
 		},

internal/provider/kubernetes/kubernetes.go

@@ -0,0 +1,202 @@
+// Package kubernetes is a provider.Provider that creates real Pods running
+// a Squid container in the same cluster the operator itself runs in —
+// unlike a cloud provider, "creating compute" here means talking back to
+// the very Kubernetes API the operator is already watching.
+package kubernetes
+
+import (
+	"context"
+	"fmt"
+
+	corev1 "k8s.io/api/core/v1"
+	apierrors "k8s.io/apimachinery/pkg/api/errors"
+	metav1 "k8s.io/apimachinery/pkg/apis/meta/v1"
+	"k8s.io/apimachinery/pkg/runtime"
+	"k8s.io/apimachinery/pkg/types"
+	"k8s.io/client-go/tools/cache"
+	ctrl "sigs.k8s.io/controller-runtime"
+	"sigs.k8s.io/controller-runtime/pkg/client"
+
+	"gitea.home.hrajfrisbee.cz/kacerr/egress-proxies-operator/internal/provider"
+)
+
+// defaultImage is Canonical's actively maintained Squid image for Ubuntu
+// 24.04 LTS, verified before picking it: a public image (no build/load
+// step needed for a kind demo), 50M+ pulls, updated the same day this
+// decision was made.
+const defaultImage = "ubuntu/squid:6.6-24.04_edge"
+
+// Provider creates proxy Pods. It builds its own client rather than
+// depending on the manager's, via ctrl.GetConfig() — which auto-detects
+// in-cluster config when running as a Pod and falls back to the local
+// kubeconfig otherwise. That's what makes `make run` against a local kind
+// cluster and running in-cluster use the exact same code path with no
+// provider-specific wiring in cmd/main.go.
+type Provider struct {
+	client client.Client
+	image  string
+}
+
+// New builds a kubernetes Provider from its config block. Satisfies
+// registry.Constructor.
+func New(_ context.Context, cfg provider.ProviderConfig) (provider.Provider, error) {
+	restCfg, err := ctrl.GetConfig()
+	if err != nil {
+		return nil, fmt.Errorf("kubernetes provider %q: loading kubeconfig: %w", cfg.Name, err)
+	}
+	scheme := runtime.NewScheme()
+	if err := corev1.AddToScheme(scheme); err != nil {
+		return nil, fmt.Errorf("kubernetes provider %q: %w", cfg.Name, err)
+	}
+	c, err := client.New(restCfg, client.Options{Scheme: scheme})
+	if err != nil {
+		return nil, fmt.Errorf("kubernetes provider %q: building client: %w", cfg.Name, err)
+	}
+	return newWithClient(c, cfg), nil
+}
+
+// newWithClient builds a Provider around an already-constructed client,
+// bypassing ctrl.GetConfig(). Tests use this exclusively — New() must
+// never run under `go test`, since ctrl.GetConfig() would happily connect
+// to whatever real cluster the developer's kubeconfig points at.
+func newWithClient(c client.Client, cfg provider.ProviderConfig) *Provider {
+	image := defaultImage
+	if cfg.Kubernetes != nil && cfg.Kubernetes.Image != "" {
+		image = cfg.Kubernetes.Image
+	}
+	return &Provider{client: c, image: image}
+}
+
+// Create creates a Pod running the proxy container. Idempotent by
+// req.Name: if a Pod with that name already exists in req.Namespace, its
+// providerID is returned rather than erroring, so a repeat call after a
+// crash finds the existing Pod instead of creating a duplicate.
+func (p *Provider) Create(ctx context.Context, req provider.CreateRequest) (string, error) {
+	pod := buildPod(p.image, req)
+	if err := p.client.Create(ctx, pod); err != nil {
+		if apierrors.IsAlreadyExists(err) {
+			return providerID(req.Namespace, req.Name), nil
+		}
+		return "", classify("create", req.Name, err)
+	}
+	return providerID(req.Namespace, req.Name), nil
+}
+
+// Get returns the current state of a previously created Pod.
+func (p *Provider) Get(ctx context.Context, id string) (*provider.Instance, error) {
+	ns, name, err := parseProviderID(id)
+	if err != nil {
+		return nil, provider.Wrap(provider.ErrPermanent, "get", "kubernetes", id, err)
+	}
+	var pod corev1.Pod
+	if err := p.client.Get(ctx, types.NamespacedName{Namespace: ns, Name: name}, &pod); err != nil {
+		if apierrors.IsNotFound(err) {
+			return nil, provider.Wrap(provider.ErrNotFound, "get", "kubernetes", id, nil)
+		}
+		return nil, classify("get", id, err)
+	}
+	return instanceFromPod(&pod), nil
+}
+
+// Delete is idempotent: deleting an unknown Pod is not an error.
+func (p *Provider) Delete(ctx context.Context, id string) error {
+	ns, name, err := parseProviderID(id)
+	if err != nil {
+		return provider.Wrap(provider.ErrPermanent, "delete", "kubernetes", id, err)
+	}
+	pod := &corev1.Pod{ObjectMeta: metav1.ObjectMeta{Namespace: ns, Name: name}}
+	if err := p.client.Delete(ctx, pod); err != nil && !apierrors.IsNotFound(err) {
+		return classify("delete", id, err)
+	}
+	return nil
+}
+
+// ListByTag returns every Pod carrying LabelManaged, across every
+// namespace — orphan GC needs to find proxy Pods regardless of which
+// namespace Proxy CRs happen to live in, which is why this provider's RBAC
+// is cluster-scoped rather than namespaced.
+func (p *Provider) ListByTag(ctx context.Context) ([]provider.Instance, error) {
+	var pods corev1.PodList
+	if err := p.client.List(ctx, &pods, client.MatchingLabels{
+		provider.LabelManaged: provider.LabelManagedYes,
+	}); err != nil {
+		return nil, classify("list", "", err)
+	}
+	out := make([]provider.Instance, 0, len(pods.Items))
+	for i := range pods.Items {
+		out = append(out, *instanceFromPod(&pods.Items[i]))
+	}
+	return out, nil
+}
+
+// providerID encodes namespace and name into the opaque providerID string
+// the Provider interface exposes, so Get/Delete are self-contained without
+// needing to separately track or re-derive which namespace a Pod lives in
+// — the same reasoning as the GCP provider's zone-qualified providerID.
+func providerID(namespace, name string) string {
+	return namespace + "/" + name
+}
+
+func parseProviderID(id string) (namespace, name string, err error) {
+	ns, n, err := cache.SplitMetaNamespaceKey(id)
+	if err != nil {
+		return "", "", err
+	}
+	if ns == "" {
+		return "", "", fmt.Errorf("providerID %q missing a namespace", id)
+	}
+	return ns, n, nil
+}
+
+func instanceFromPod(pod *corev1.Pod) *provider.Instance {
+	inst := &provider.Instance{
+		ID:        providerID(pod.Namespace, pod.Name),
+		UID:       pod.Labels[provider.LabelUID],
+		CreatedAt: pod.CreationTimestamp.Time,
+		State:     stateFromPod(pod),
+	}
+	if inst.State == provider.StateRunning {
+		inst.IP = pod.Status.PodIP
+	}
+	return inst
+}
+
+// stateFromPod maps a Pod's phase to InstanceState. Succeeded/Failed/
+// Unknown all collapse to Terminated: the reconciler treats Stopped and
+// Terminated identically (delete and recreate — cattle, not pets), so a
+// finer-grained distinction between "the container exited" and "the node
+// went unreachable" wouldn't change any behavior.
+func stateFromPod(pod *corev1.Pod) provider.InstanceState {
+	switch pod.Status.Phase {
+	case corev1.PodPending:
+		return provider.StateProvisioning
+	case corev1.PodRunning:
+		if pod.Status.PodIP == "" {
+			// Never publish an empty IP while the kubelet is still
+			// finishing setup.
+			return provider.StateProvisioning
+		}
+		return provider.StateRunning
+	default: // Succeeded, Failed, Unknown
+		return provider.StateTerminated
+	}
+}
+
+// classify maps a Kubernetes API error to the provider error taxonomy.
+// Quota-exceeded and RBAC-denied both surface as 403 Forbidden from the
+// API server with nothing in apierrors to tell them apart programmatically
+// — a known simplification for this prototype; both classify as
+// ErrPermanent, which is the safer default of the two (stop retrying
+// rather than hammering an API server that will never allow the request).
+func classify(op, id string, err error) error {
+	switch {
+	case apierrors.IsNotFound(err):
+		return provider.Wrap(provider.ErrNotFound, op, "kubernetes", id, err)
+	case apierrors.IsTooManyRequests(err), apierrors.IsServerTimeout(err), apierrors.IsTimeout(err):
+		return provider.Wrap(provider.ErrTransient, op, "kubernetes", id, err)
+	case apierrors.IsForbidden(err), apierrors.IsInvalid(err), apierrors.IsBadRequest(err), apierrors.IsUnauthorized(err):
+		return provider.Wrap(provider.ErrPermanent, op, "kubernetes", id, err)
+	default:
+		return provider.Wrap(provider.ErrTransient, op, "kubernetes", id, err)
+	}
+}

internal/provider/kubernetes/kubernetes_test.go

@@ -0,0 +1,245 @@
+package kubernetes
+
+import (
+	"context"
+	"errors"
+	"testing"
+
+	corev1 "k8s.io/api/core/v1"
+	apierrors "k8s.io/apimachinery/pkg/api/errors"
+	metav1 "k8s.io/apimachinery/pkg/apis/meta/v1"
+	"k8s.io/apimachinery/pkg/runtime"
+	"k8s.io/apimachinery/pkg/runtime/schema"
+	"k8s.io/apimachinery/pkg/types"
+	"sigs.k8s.io/controller-runtime/pkg/client/fake"
+
+	"gitea.home.hrajfrisbee.cz/kacerr/egress-proxies-operator/internal/provider"
+)
+
+func newTestProvider(objs ...runtime.Object) *Provider {
+	scheme := runtime.NewScheme()
+	if err := corev1.AddToScheme(scheme); err != nil {
+		panic(err)
+	}
+	c := fake.NewClientBuilder().WithScheme(scheme).WithRuntimeObjects(objs...).Build()
+	return newWithClient(c, provider.ProviderConfig{Name: "kubernetes"})
+}
+
+func testPod(namespace, name, uid string, phase corev1.PodPhase, ip string) *corev1.Pod {
+	return &corev1.Pod{
+		ObjectMeta: metav1.ObjectMeta{
+			Name:      name,
+			Namespace: namespace,
+			Labels: map[string]string{
+				provider.LabelManaged: provider.LabelManagedYes,
+				provider.LabelUID:     uid,
+			},
+		},
+		Status: corev1.PodStatus{Phase: phase, PodIP: ip},
+	}
+}
+
+func TestProvider_Create_buildsPodAndReturnsProviderID(t *testing.T) {
+	t.Parallel()
+	p := newTestProvider()
+	id, err := p.Create(context.Background(), provider.CreateRequest{
+		Name: "proxy-abc", UID: "uid-1", Namespace: "crawl", Port: 3128,
+	})
+	if err != nil {
+		t.Fatalf("Create() error = %v", err)
+	}
+	if id != "crawl/proxy-abc" {
+		t.Errorf("Create() id = %q, want %q", id, "crawl/proxy-abc")
+	}
+
+	var pod corev1.Pod
+	key := types.NamespacedName{Namespace: "crawl", Name: "proxy-abc"}
+	if err := p.client.Get(context.Background(), key, &pod); err != nil {
+		t.Fatalf("expected the Pod to exist: %v", err)
+	}
+	if pod.Labels[provider.LabelUID] != "uid-1" {
+		t.Errorf("pod UID label = %q, want %q", pod.Labels[provider.LabelUID], "uid-1")
+	}
+}
+
+func TestProvider_Create_idempotent(t *testing.T) {
+	t.Parallel()
+	p := newTestProvider()
+	ctx := context.Background()
+	req := provider.CreateRequest{Name: "proxy-dup", UID: "uid-2", Namespace: "crawl", Port: 3128}
+
+	id1, err := p.Create(ctx, req)
+	if err != nil {
+		t.Fatalf("Create() #1 error = %v", err)
+	}
+	id2, err := p.Create(ctx, req)
+	if err != nil {
+		t.Fatalf("Create() #2 error = %v, want nil (AlreadyExists must be absorbed)", err)
+	}
+	if id1 != id2 {
+		t.Errorf("Create() not idempotent: %q != %q", id1, id2)
+	}
+}
+
+func TestProvider_Get_stateMapping(t *testing.T) {
+	t.Parallel()
+	tests := []struct {
+		name      string
+		phase     corev1.PodPhase
+		ip        string
+		wantState provider.InstanceState
+		wantIP    string
+	}{
+		{"pending", corev1.PodPending, "", provider.StateProvisioning, ""},
+		{"running with IP", corev1.PodRunning, "10.0.0.5", provider.StateRunning, "10.0.0.5"},
+		{"running without IP yet", corev1.PodRunning, "", provider.StateProvisioning, ""},
+		{"succeeded", corev1.PodSucceeded, "10.0.0.5", provider.StateTerminated, ""},
+		{"failed", corev1.PodFailed, "10.0.0.5", provider.StateTerminated, ""},
+		{"unknown", corev1.PodUnknown, "10.0.0.5", provider.StateTerminated, ""},
+	}
+	for _, tc := range tests {
+		t.Run(tc.name, func(t *testing.T) {
+			t.Parallel()
+			pod := testPod("crawl", "proxy-"+tc.name, "uid", tc.phase, tc.ip)
+			p := newTestProvider(pod)
+			inst, err := p.Get(context.Background(), "crawl/"+pod.Name)
+			if err != nil {
+				t.Fatalf("Get() error = %v", err)
+			}
+			if inst.State != tc.wantState {
+				t.Errorf("State = %v, want %v", inst.State, tc.wantState)
+			}
+			if inst.IP != tc.wantIP {
+				t.Errorf("IP = %q, want %q", inst.IP, tc.wantIP)
+			}
+			if inst.UID != "uid" {
+				t.Errorf("UID = %q, want %q", inst.UID, "uid")
+			}
+		})
+	}
+}
+
+func TestProvider_Get_notFound(t *testing.T) {
+	t.Parallel()
+	p := newTestProvider()
+	_, err := p.Get(context.Background(), "crawl/does-not-exist")
+	if !errors.Is(err, provider.ErrNotFound) {
+		t.Errorf("Get() error = %v, want ErrNotFound", err)
+	}
+}
+
+func TestProvider_Get_malformedProviderID(t *testing.T) {
+	t.Parallel()
+	p := newTestProvider()
+	_, err := p.Get(context.Background(), "no-namespace-here")
+	if err == nil {
+		t.Fatal("Get() error = nil, want error for a providerID with no namespace")
+	}
+}
+
+func TestProvider_Delete_idempotent(t *testing.T) {
+	t.Parallel()
+	pod := testPod("crawl", "proxy-del", "uid", corev1.PodRunning, "10.0.0.5")
+	p := newTestProvider(pod)
+	ctx := context.Background()
+
+	if err := p.Delete(ctx, "crawl/proxy-del"); err != nil {
+		t.Fatalf("Delete() error = %v", err)
+	}
+	if err := p.Delete(ctx, "crawl/proxy-del"); err != nil {
+		t.Errorf("Delete() (repeat) error = %v, want nil", err)
+	}
+	if err := p.Delete(ctx, "crawl/never-existed"); err != nil {
+		t.Errorf("Delete() on unknown ID error = %v, want nil", err)
+	}
+
+	if _, err := p.Get(ctx, "crawl/proxy-del"); !errors.Is(err, provider.ErrNotFound) {
+		t.Errorf("Get() after Delete() error = %v, want ErrNotFound", err)
+	}
+}
+
+func TestProvider_Delete_malformedProviderID(t *testing.T) {
+	t.Parallel()
+	p := newTestProvider()
+	if err := p.Delete(context.Background(), "no-namespace-here"); err == nil {
+		t.Fatal("Delete() error = nil, want error for a providerID with no namespace")
+	}
+}
+
+func TestProvider_ListByTag_filtersByLabelAcrossNamespaces(t *testing.T) {
+	t.Parallel()
+	managed1 := testPod("crawl", "proxy-a", "uid-a", corev1.PodRunning, "10.0.0.1")
+	managed2 := testPod("other-ns", "proxy-b", "uid-b", corev1.PodPending, "")
+	unmanaged := &corev1.Pod{ObjectMeta: metav1.ObjectMeta{Name: "not-ours", Namespace: "crawl"}}
+
+	p := newTestProvider(managed1, managed2, unmanaged)
+	instances, err := p.ListByTag(context.Background())
+	if err != nil {
+		t.Fatalf("ListByTag() error = %v", err)
+	}
+	if len(instances) != 2 {
+		t.Fatalf("len(instances) = %d, want 2 (unmanaged Pod must be excluded)", len(instances))
+	}
+
+	byID := make(map[string]provider.Instance, len(instances))
+	for _, inst := range instances {
+		byID[inst.ID] = inst
+	}
+	a, ok := byID["crawl/proxy-a"]
+	if !ok {
+		t.Fatal(`instances missing "crawl/proxy-a"`)
+	}
+	if a.State != provider.StateRunning || a.IP != "10.0.0.1" {
+		t.Errorf("crawl/proxy-a = %+v, want Running/10.0.0.1", a)
+	}
+	if _, ok := byID["other-ns/proxy-b"]; !ok {
+		t.Fatal(`instances missing "other-ns/proxy-b" (ListByTag must not be namespace-scoped)`)
+	}
+}
+
+func TestNewWithClient_image(t *testing.T) {
+	t.Parallel()
+	scheme := runtime.NewScheme()
+	_ = corev1.AddToScheme(scheme)
+	c := fake.NewClientBuilder().WithScheme(scheme).Build()
+
+	def := newWithClient(c, provider.ProviderConfig{Name: "k8s"})
+	if def.image != defaultImage {
+		t.Errorf("default image = %q, want %q", def.image, defaultImage)
+	}
+
+	custom := newWithClient(c, provider.ProviderConfig{
+		Name:       "k8s",
+		Kubernetes: &provider.KubernetesConfig{Image: "myregistry/squid:custom"},
+	})
+	if custom.image != "myregistry/squid:custom" {
+		t.Errorf("custom image = %q, want %q", custom.image, "myregistry/squid:custom")
+	}
+}
+
+func TestClassify(t *testing.T) {
+	t.Parallel()
+	gr := schema.GroupResource{Group: "", Resource: "pods"}
+	tests := []struct {
+		name string
+		err  error
+		want error
+	}{
+		{"not found", apierrors.NewNotFound(gr, "x"), provider.ErrNotFound},
+		{"too many requests", apierrors.NewTooManyRequests("slow down", 5), provider.ErrTransient},
+		{"server timeout", apierrors.NewServerTimeout(gr, "create", 5), provider.ErrTransient},
+		{"forbidden", apierrors.NewForbidden(gr, "x", errors.New("denied")), provider.ErrPermanent},
+		{"bad request", apierrors.NewBadRequest("bad"), provider.ErrPermanent},
+		{"unauthorized", apierrors.NewUnauthorized("no creds"), provider.ErrPermanent},
+		{"unclassified", errors.New("boom"), provider.ErrTransient},
+	}
+	for _, tc := range tests {
+		t.Run(tc.name, func(t *testing.T) {
+			t.Parallel()
+			got := classify("op", "id", tc.err)
+			if !errors.Is(got, tc.want) {
+				t.Errorf("classify(%v) = %v, want class %v", tc.err, got, tc.want)
+			}
+		})
+	}
+}

internal/provider/kubernetes/pod.go

@@ -0,0 +1,67 @@
+package kubernetes
+
+import (
+	"fmt"
+
+	corev1 "k8s.io/api/core/v1"
+	metav1 "k8s.io/apimachinery/pkg/apis/meta/v1"
+
+	"gitea.home.hrajfrisbee.cz/kacerr/egress-proxies-operator/internal/provider"
+)
+
+const proxyContainerName = "squid"
+
+// writeConfigAndExec is the container's entrypoint: write the config the
+// SQUID_CONF env var carries to disk, then exec squid against it. Avoids a
+// separate ConfigMap object per proxy instance — there's still only one
+// Kubernetes object (the Pod) to create, track, and clean up per proxy.
+const writeConfigAndExec = `printf '%s' "$SQUID_CONF" > /etc/squid/squid.conf && exec squid -N -f /etc/squid/squid.conf`
+
+// buildPod constructs the Pod for a proxy instance. Pure and side-effect
+// free, so it's unit-tested directly without a cluster — the same pattern
+// the GCP provider's buildInsertRequest uses.
+func buildPod(image string, req provider.CreateRequest) *corev1.Pod {
+	return &corev1.Pod{
+		ObjectMeta: metav1.ObjectMeta{
+			Name:      req.Name,
+			Namespace: req.Namespace,
+			Labels: map[string]string{
+				provider.LabelManaged: provider.LabelManagedYes,
+				provider.LabelUID:     req.UID,
+			},
+		},
+		Spec: corev1.PodSpec{
+			RestartPolicy: corev1.RestartPolicyAlways,
+			Containers: []corev1.Container{{
+				Name:    proxyContainerName,
+				Image:   image,
+				Command: []string{"/bin/sh", "-c"},
+				Args:    []string{writeConfigAndExec},
+				Env: []corev1.EnvVar{{
+					Name:  "SQUID_CONF",
+					Value: squidConf(req.Port),
+				}},
+				Ports: []corev1.ContainerPort{{
+					ContainerPort: req.Port,
+					Protocol:      corev1.ProtocolTCP,
+				}},
+			}},
+		},
+	}
+}
+
+// squidConf generates a minimal Squid config listening on port, permissive
+// enough to forward CONNECT and plain HTTP to any destination. Open by
+// design: this is a proxy for a private cluster, not internet-facing, and
+// installing/configuring proxy software is explicitly out of scope for
+// this operator's real (GCP) provider too — cloud-init is passed through
+// there, never interpreted. via/forwarded_for are turned off so the proxy
+// doesn't leak the Pod's identity to the origin.
+func squidConf(port int32) string {
+	return fmt.Sprintf(`http_port %d
+acl all src 0.0.0.0/0
+http_access allow all
+via off
+forwarded_for off
+`, port)
+}

internal/provider/kubernetes/pod_test.go

@@ -0,0 +1,91 @@
+package kubernetes
+
+import (
+	"strings"
+	"testing"
+
+	corev1 "k8s.io/api/core/v1"
+
+	"gitea.home.hrajfrisbee.cz/kacerr/egress-proxies-operator/internal/provider"
+)
+
+func TestBuildPod(t *testing.T) {
+	t.Parallel()
+	req := provider.CreateRequest{
+		Name:      "proxy-abc123",
+		UID:       "uid-1",
+		Namespace: "crawl",
+		ProxyName: "proxy-eu-1",
+		Port:      3128,
+	}
+	pod := buildPod("ubuntu/squid:6.6-24.04_edge", req)
+
+	if pod.Name != req.Name {
+		t.Errorf("pod.Name = %q, want %q", pod.Name, req.Name)
+	}
+	if pod.Namespace != req.Namespace {
+		t.Errorf("pod.Namespace = %q, want %q", pod.Namespace, req.Namespace)
+	}
+	if pod.Labels[provider.LabelManaged] != provider.LabelManagedYes {
+		t.Errorf("labels[%s] = %q, want %q", provider.LabelManaged, pod.Labels[provider.LabelManaged], provider.LabelManagedYes)
+	}
+	if pod.Labels[provider.LabelUID] != req.UID {
+		t.Errorf("labels[%s] = %q, want %q", provider.LabelUID, pod.Labels[provider.LabelUID], req.UID)
+	}
+	if pod.Spec.RestartPolicy != corev1.RestartPolicyAlways {
+		t.Errorf("RestartPolicy = %v, want Always", pod.Spec.RestartPolicy)
+	}
+	if len(pod.Spec.Containers) != 1 {
+		t.Fatalf("len(Containers) = %d, want 1", len(pod.Spec.Containers))
+	}
+	c := pod.Spec.Containers[0]
+	if c.Image != "ubuntu/squid:6.6-24.04_edge" {
+		t.Errorf("Image = %q, want ubuntu/squid:6.6-24.04_edge", c.Image)
+	}
+	if len(c.Ports) != 1 || c.Ports[0].ContainerPort != req.Port {
+		t.Errorf("Ports = %+v, want a single entry on port %d", c.Ports, req.Port)
+	}
+	var confEnv string
+	for _, e := range c.Env {
+		if e.Name == "SQUID_CONF" {
+			confEnv = e.Value
+		}
+	}
+	if !strings.Contains(confEnv, "http_port 3128") {
+		t.Errorf("SQUID_CONF env = %q, want it to contain %q", confEnv, "http_port 3128")
+	}
+}
+
+func TestBuildPod_usesRequestPort(t *testing.T) {
+	t.Parallel()
+	req := provider.CreateRequest{Name: "proxy-x", UID: "uid-2", Namespace: "ns", Port: 8080}
+	pod := buildPod("img", req)
+	conf := envValue(t, pod, "SQUID_CONF")
+	if !strings.Contains(conf, "http_port 8080") {
+		t.Errorf("SQUID_CONF = %q, want it to contain %q", conf, "http_port 8080")
+	}
+	if pod.Spec.Containers[0].Ports[0].ContainerPort != 8080 {
+		t.Errorf("ContainerPort = %d, want 8080", pod.Spec.Containers[0].Ports[0].ContainerPort)
+	}
+}
+
+func TestSquidConf_permissive(t *testing.T) {
+	t.Parallel()
+	conf := squidConf(3128)
+	for _, want := range []string{"http_port 3128", "http_access allow all", "via off", "forwarded_for off"} {
+		if !strings.Contains(conf, want) {
+			t.Errorf("squidConf() = %q, want it to contain %q", conf, want)
+		}
+	}
+}
+
+func envValue(t *testing.T, pod *corev1.Pod, name string) string {
+	t.Helper()
+	for _, e := range pod.Spec.Containers[0].Env {
+		if e.Name == name {
+			return e.Value
+		}
+	}
+	t.Fatalf("env var %q not found on container", name)
+	return ""
+}

test/e2e/e2e_suite_test.go

@@ -31,19 +31,14 @@ import (
 	"gitea.home.hrajfrisbee.cz/kacerr/egress-proxies-operator/test/utils"
 )
 
-var (
 // managerImage is the manager image to be built and loaded for testing.
-	managerImage = "example.com/egress-proxies-operator:v0.0.1"
-	// shouldCleanupCertManager tracks whether CertManager was installed by this suite.
-	shouldCleanupCertManager = false
-)
+var managerImage = "example.com/egress-proxies-operator:v0.0.1"
 
-// TestE2E runs the e2e test suite to validate the solution in an isolated environment.
-// The default setup requires Kind and CertManager.
+// TestE2E runs the e2e test suite to validate the solution in an isolated
+// environment. The default setup requires Kind.
 //
 // To enable kubectl kuberc (use custom kubectl configurations), set: KUBECTL_KUBERC=true
 // By default, kuberc is disabled to ensure consistent test behavior across different environments.
-// To skip CertManager installation, set: CERT_MANAGER_INSTALL_SKIP=true
 func TestE2E(t *testing.T) {
 	RegisterFailHandler(Fail)
 	_, _ = fmt.Fprintf(GinkgoWriter, "Starting egress-proxies-operator e2e test suite\n")
@@ -56,18 +51,11 @@ var _ = BeforeSuite(func() {
 	_, err := utils.Run(cmd)
 	ExpectWithOffset(1, err).NotTo(HaveOccurred(), "Failed to build the manager image")
 
-	// TODO(user): If you want to change the e2e test vendor from Kind,
-	// ensure the image is built and available, then remove the following block.
 	By("loading the manager image on Kind")
 	err = utils.LoadImageToKindClusterWithName(managerImage)
 	ExpectWithOffset(1, err).NotTo(HaveOccurred(), "Failed to load the manager image into Kind")
 
 	configureKubectlKubeRC()
-	setupCertManager()
-})
-
-var _ = AfterSuite(func() {
-	teardownCertManager()
 })
 
 // Disable kubectl kuberc by default for test isolation.
@@ -84,36 +72,3 @@ func configureKubectlKubeRC() {
 		_, _ = fmt.Fprintf(GinkgoWriter, "kubectl kuberc enabled (KUBECTL_KUBERC=true)\n")
 	}
 }
-
-// setupCertManager installs CertManager if needed for webhook tests.
-// Skips installation if CERT_MANAGER_INSTALL_SKIP=true or if already present.
-func setupCertManager() {
-	if os.Getenv("CERT_MANAGER_INSTALL_SKIP") == "true" {
-		_, _ = fmt.Fprintf(GinkgoWriter, "Skipping CertManager installation (CERT_MANAGER_INSTALL_SKIP=true)\n")
-		return
-	}
-
-	By("checking if CertManager is already installed")
-	if utils.IsCertManagerCRDsInstalled() {
-		_, _ = fmt.Fprintf(GinkgoWriter, "CertManager is already installed. Skipping installation.\n")
-		return
-	}
-
-	// Mark for cleanup before installation to handle interruptions and partial installs.
-	shouldCleanupCertManager = true
-
-	By("installing CertManager")
-	Expect(utils.InstallCertManager()).To(Succeed(), "Failed to install CertManager")
-}
-
-// teardownCertManager uninstalls CertManager if it was installed by setupCertManager.
-// This ensures we only remove what we installed.
-func teardownCertManager() {
-	if !shouldCleanupCertManager {
-		_, _ = fmt.Fprintf(GinkgoWriter, "Skipping CertManager cleanup (not installed by this suite)\n")
-		return
-	}
-
-	By("uninstalling CertManager")
-	utils.UninstallCertManager()
-}

test/utils/utils.go

@@ -17,8 +17,6 @@ limitations under the License.
 package utils
 
 import (
-	"bufio"
-	"bytes"
 	"fmt"
 	"os"
 	"os/exec"
@@ -28,17 +26,10 @@ import (
 )
 
 const (
-	certmanagerVersion = "v1.20.2"
-	certmanagerURLTmpl = "https://github.com/cert-manager/cert-manager/releases/download/%s/cert-manager.yaml"
-
 	defaultKindBinary  = "kind"
 	defaultKindCluster = "kind"
 )
 
-func warnError(err error) {
-	_, _ = fmt.Fprintf(GinkgoWriter, "warning: %v\n", err)
-}
-
 // Run executes the provided command within this context
 func Run(cmd *exec.Cmd) (string, error) {
 	dir, _ := GetProjectDir()
@@ -59,80 +50,6 @@ func Run(cmd *exec.Cmd) (string, error) {
 	return string(output), nil
 }
 
-// UninstallCertManager uninstalls the cert manager
-func UninstallCertManager() {
-	url := fmt.Sprintf(certmanagerURLTmpl, certmanagerVersion)
-	cmd := exec.Command("kubectl", "delete", "-f", url)
-	if _, err := Run(cmd); err != nil {
-		warnError(err)
-	}
-
-	// Delete leftover leases in kube-system (not cleaned by default)
-	kubeSystemLeases := []string{
-		"cert-manager-cainjector-leader-election",
-		"cert-manager-controller",
-	}
-	for _, lease := range kubeSystemLeases {
-		cmd = exec.Command("kubectl", "delete", "lease", lease,
-			"-n", "kube-system", "--ignore-not-found", "--force", "--grace-period=0")
-		if _, err := Run(cmd); err != nil {
-			warnError(err)
-		}
-	}
-}
-
-// InstallCertManager installs the cert manager bundle.
-func InstallCertManager() error {
-	url := fmt.Sprintf(certmanagerURLTmpl, certmanagerVersion)
-	cmd := exec.Command("kubectl", "apply", "-f", url)
-	if _, err := Run(cmd); err != nil {
-		return err
-	}
-	// Wait for cert-manager-webhook to be ready, which can take time if cert-manager
-	// was re-installed after uninstalling on a cluster.
-	cmd = exec.Command("kubectl", "wait", "deployment.apps/cert-manager-webhook",
-		"--for", "condition=Available",
-		"--namespace", "cert-manager",
-		"--timeout", "5m",
-	)
-
-	_, err := Run(cmd)
-	return err
-}
-
-// IsCertManagerCRDsInstalled checks if any Cert Manager CRDs are installed
-// by verifying the existence of key CRDs related to Cert Manager.
-func IsCertManagerCRDsInstalled() bool {
-	// List of common Cert Manager CRDs
-	certManagerCRDs := []string{
-		"certificates.cert-manager.io",
-		"issuers.cert-manager.io",
-		"clusterissuers.cert-manager.io",
-		"certificaterequests.cert-manager.io",
-		"orders.acme.cert-manager.io",
-		"challenges.acme.cert-manager.io",
-	}
-
-	// Execute the kubectl command to get all CRDs
-	cmd := exec.Command("kubectl", "get", "crds")
-	output, err := Run(cmd)
-	if err != nil {
-		return false
-	}
-
-	// Check if any of the Cert Manager CRDs are present
-	crdList := GetNonEmptyLines(output)
-	for _, crd := range certManagerCRDs {
-		for _, line := range crdList {
-			if strings.Contains(line, crd) {
-				return true
-			}
-		}
-	}
-
-	return false
-}
-
 // LoadImageToKindClusterWithName loads a local docker image to the kind cluster
 func LoadImageToKindClusterWithName(name string) error {
 	cluster := defaultKindCluster
@@ -172,55 +89,3 @@ func GetProjectDir() (string, error) {
 	wd = strings.ReplaceAll(wd, "/test/e2e", "")
 	return wd, nil
 }
-
-// UncommentCode searches for target in the file and remove the comment prefix
-// of the target content. The target content may span multiple lines.
-func UncommentCode(filename, target, prefix string) error {
-	// false positive
-	// nolint:gosec
-	content, err := os.ReadFile(filename)
-	if err != nil {
-		return fmt.Errorf("failed to read file %q: %w", filename, err)
-	}
-	strContent := string(content)
-
-	idx := strings.Index(strContent, target)
-	if idx < 0 {
-		return fmt.Errorf("unable to find the code %q to be uncommented", target)
-	}
-
-	out := new(bytes.Buffer)
-	_, err = out.Write(content[:idx])
-	if err != nil {
-		return fmt.Errorf("failed to write to output: %w", err)
-	}
-
-	scanner := bufio.NewScanner(bytes.NewBufferString(target))
-	if !scanner.Scan() {
-		return nil
-	}
-	for {
-		if _, err = out.WriteString(strings.TrimPrefix(scanner.Text(), prefix)); err != nil {
-			return fmt.Errorf("failed to write to output: %w", err)
-		}
-		// Avoid writing a newline in case the previous line was the last in target.
-		if !scanner.Scan() {
-			break
-		}
-		if _, err = out.WriteString("\n"); err != nil {
-			return fmt.Errorf("failed to write to output: %w", err)
-		}
-	}
-
-	if _, err = out.Write(content[idx+len(target):]); err != nil {
-		return fmt.Errorf("failed to write to output: %w", err)
-	}
-
-	// false positive
-	// nolint:gosec
-	if err = os.WriteFile(filename, out.Bytes(), 0644); err != nil {
-		return fmt.Errorf("failed to write file %q: %w", filename, err)
-	}
-
-	return nil
-}