Thank you for asking this question in the support community. It appears, as you described, that proxy ARP is the issue. The proxy ARP feature is enabled by default on AOS devices. In general, the principle of proxy ARP allows a router to insert its IP address in the source IP address field of a packet (if the packet is from a host on one of its subnetworks). This allows hosts to reach devices on other subnetworks without implementing routing or specifying a default gateway. If proxy ARP is enabled, AOS will respond to all ARP requests with its specified medium access control (MAC) address and forward packets accordingly.
The following example disables proxy ARP on the Ethernet interface:
(config)# interface ethernet 0/1
(config-eth 0/1)# no ip proxy-arp
I hope that makes sense, but please do not hesitate to reply to this post with any additional questions or information. I will be happy to help in any way I can.