There is a problem when you create a proxy for Nested sequences or VEGFX file in VEGAS Pro timeline.
Let say the VEGFX project in kinda heavy cuz its a 4K media, you right click and select proxy, the media will play very well at a pixelated preview, which I don't mind.
But if you make any changes on the VEGFX project, those changes will not reflect in the proxy clip till you set the preview quality at least on Good Auto. Seems like the proxy will just burn the data into SFVP0 file thingy.
To overcome this, I delete the SFVP0 file and re-create the proxy again. Would be great if VEGAS Team allow editor to re-create proxy to update the nested/vegfx file.
I never try VEGAS Effects 3 new proxy feature. I'm not sure how impactful that would be when editing in VEGAS Pro.