diff --git a/arduino-ide-extension/src/node/config-service-impl.ts b/arduino-ide-extension/src/node/config-service-impl.ts
index 1f56748cc..05e1babf0 100644
--- a/arduino-ide-extension/src/node/config-service-impl.ts
+++ b/arduino-ide-extension/src/node/config-service-impl.ts
@@ -97,7 +97,7 @@ export class ConfigServiceImpl
     };
     copyDefaultCliConfig.locale = locale || 'en';
     const proxy = Network.stringify(network);
-    copyDefaultCliConfig.network = { proxy };
+    copyDefaultCliConfig.network = proxy ? { proxy } : {}; // must be an empty object to unset the default prop with the `WriteRequest`.
 
     // always use the port of the daemon
     const port = await this.daemon.getPort();
diff --git a/arduino-ide-extension/src/test/node/config-service-impl.slow-test.ts b/arduino-ide-extension/src/test/node/config-service-impl.slow-test.ts
new file mode 100644
index 000000000..2a50a9a7b
--- /dev/null
+++ b/arduino-ide-extension/src/test/node/config-service-impl.slow-test.ts
@@ -0,0 +1,116 @@
+import { DisposableCollection } from '@theia/core/lib/common/disposable';
+import { deepClone } from '@theia/core/lib/common/objects';
+import type { MaybePromise, Mutable } from '@theia/core/lib/common/types';
+import { Container } from '@theia/core/shared/inversify';
+import { expect } from 'chai';
+import { load as parseYaml } from 'js-yaml';
+import { promises as fs } from 'node:fs';
+import { Config, Network } from '../../common/protocol/config-service';
+import { CLI_CONFIG, DefaultCliConfig } from '../../node/cli-config';
+import { ConfigServiceImpl } from '../../node/config-service-impl';
+import { ConfigDirUriProvider } from '../../node/theia/env-variables/env-variables-server';
+import { createBaseContainer, startDaemon } from './node-test-bindings';
+
+describe('config-service-impl', () => {
+  describe('setConfiguration', () => {
+    const manualProxy: Network = {
+      protocol: 'http',
+      hostname: 'hostname',
+      password: 'secret',
+      username: 'username',
+      port: '1234',
+    };
+    const noProxy: Network = 'none';
+
+    let configService: ConfigServiceImpl;
+    let toDispose: DisposableCollection;
+    let cliConfigPath: string;
+
+    beforeEach(async () => {
+      const container = await createContainer();
+      toDispose = new DisposableCollection();
+      await startDaemon(container, toDispose);
+      configService = container.get<ConfigServiceImpl>(ConfigServiceImpl);
+      const configDirUriProvider =
+        container.get<ConfigDirUriProvider>(ConfigDirUriProvider);
+      cliConfigPath = configDirUriProvider
+        .configDirUri()
+        .resolve(CLI_CONFIG)
+        .path.fsPath();
+    });
+
+    afterEach(() => toDispose.dispose());
+
+    it("should detect 'none' proxy with th default config", async () => {
+      const state = await configService.getConfiguration();
+      expect(state.config).to.be.not.undefined;
+      const config = <Config>state.config;
+      expect(config.network).to.be.equal(noProxy);
+      expect(Network.stringify(config.network)).is.undefined;
+      await assertRawConfigModel((actualModel) => {
+        expect(actualModel.network).to.be.undefined;
+      });
+    });
+
+    it('should ignore noop changes', async () => {
+      const beforeState = await configService.getConfiguration();
+      const config = <Mutable<Config>>deepClone(beforeState).config;
+      let eventCounter = 0;
+      toDispose.push(configService.onConfigChange(() => eventCounter++));
+      await configService.setConfiguration(config);
+      const afterState = await configService.getConfiguration();
+      expect(beforeState.config).to.be.deep.equal(afterState.config);
+      expect(eventCounter).to.be.equal(0);
+    });
+
+    it('should set the manual proxy', async () => {
+      const beforeState = await configService.getConfiguration();
+      const config = <Mutable<Config>>deepClone(beforeState).config;
+      config.network = manualProxy;
+      let eventCounter = 0;
+      toDispose.push(configService.onConfigChange(() => eventCounter++));
+      await configService.setConfiguration(config);
+      const afterState = await configService.getConfiguration();
+      expect(beforeState.config).to.be.not.deep.equal(afterState.config);
+      expect(afterState.config?.network).to.be.deep.equal(manualProxy);
+      expect(eventCounter).to.be.equal(1);
+      await assertRawConfigModel((actualModel) => {
+        expect(actualModel.network?.proxy).to.be.equal(
+          Network.stringify(manualProxy)
+        );
+      });
+    });
+
+    it('should unset the manual proxy', async () => {
+      const initialState = await configService.getConfiguration();
+      const config = <Mutable<Config>>deepClone(initialState).config;
+      config.network = manualProxy;
+      let eventCounter = 0;
+      toDispose.push(configService.onConfigChange(() => eventCounter++));
+      await configService.setConfiguration(config);
+      const beforeState = await configService.getConfiguration();
+      const config2 = <Mutable<Config>>deepClone(config);
+      config2.network = noProxy;
+      await configService.setConfiguration(config2);
+      const afterState = await configService.getConfiguration();
+      expect(beforeState.config).to.be.not.deep.equal(afterState.config);
+      expect(afterState.config?.network).to.be.deep.equal(noProxy);
+      expect(eventCounter).to.be.equal(2);
+      await assertRawConfigModel((actualModel) => {
+        expect(actualModel.network?.proxy).to.be.undefined;
+      });
+    });
+
+    async function createContainer(): Promise<Container> {
+      return createBaseContainer();
+    }
+
+    async function assertRawConfigModel(
+      assert: (actual: DefaultCliConfig) => MaybePromise<void>
+    ): Promise<void> {
+      const raw = await fs.readFile(cliConfigPath, { encoding: 'utf8' });
+      const model = parseYaml(raw);
+      await assert(model);
+    }
+  });
+});