This is a good change, reducing the incentive to create trusted certs for servers running on loopback. I'm happy to see Mozilla pushing it through!
Gecko: Intent to prototype & ship: Treat localhost addresses as "Potentially Trustworthy" groups.google.com/d/msg/mozi…
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Is this why using Burp and similar proxies don’t work on localhost?
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I'm not familiar enough with Gecko's internals to answer, unfortunately.
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Replying to @mikewest
It’s Chrome where it doesn’t work (requires extra effort to configure around the proxy block). Works fine on Firefox, but guessing now that too will need the workaround.

Oct 21, 2020 · 3:00 PM UTC

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Replying to @bilcorry
Point me to a bug? I don’t think I understand the problem.
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It’s not a bug, but a security feature apparently. I run into it because I teach hacking using Burp and Web Goat (running on localhost). Chrome doesn’t allow proxies on localhost by default.
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