See paritytech/polkadot-sdk#8108 .
The Proxy and Multisig pallets are still using old Currency traits, which do not overlap with holds.
This is an impact of paritytech/polkadot-sdk#226 only being partially done.
In short, this issue is about testing that interactions such as:
- an account that has reserved and frozen funds
- a proxy is added, or a multisig operation started
must currently result in balances.LiquidityRestrictions.
After https://github.com/paritytech/polkadot-sdk/pull/9560/files makes it to production runtimes, this undesirable behavior will no longer occur (that PR only fixes proxy, multisig to follow).