Return correct authz and auth errors from proxy to client #9055
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Motivation
Currently, the proxy will bubble up all errors to the client as a "ServiceNotReady" error which gets translated to a "LookupError" on the client side. This is not correct and precise error handling especially when the errors are auth and authz related. Potential auth and authz errors will get hidden behind "LookupError"s returned to the client and the client will retry connecting since "LookupError"s are retryable even though there is no point in retrying to connect on auth and authz errors.
Modifications
Handle the errors more accurately in the proxy