I have never used the Steam beta or Proton-GE or whatever information is spreading out there to noobs about what they should do, and I've been gaming exclusively on Linux for more than 20 years. Only do this beta or bleeding edge stuff if you have a problem, and a good reason to believe that will help (like people reporting your specific issue is fixed in beta). Or I guess if you're bored out of your mind. And expect other issues since it's fucking beta.
If GE received a Cease and Desist, that would be frustrating, but linux gaming would go on. If Proton got a Cease and Desist, that could be catastrophic to linux gaming. Valve could even theoretically get banned from working on linux gaming (like the Yuzu devs got banned from working on emulation). It's just not worth the risk for compatibility/performance for a smaller proportion of games.
Well, sometimes Windows games depend on propietary codecs, and until Valve can get the devs to make adjustments so the codecs aren't needed, the games aren't going to work properly in regular Proton.
If there is a free codec alternative I assume they can use that when the game calls for that codec? Perhaps I don't know enough that that's harder than replacing DirectX calls with Vulkan.
The issue is one of licensing, not technology. There's all kinds of patents in the space, and using free codecs could still infringe them. DirectX doesn't have the same patent protection. I believe in theory you could make a fully open source Linux native version of DirectX.
For more info from someone who knows more than me, see here.
I think this is an issue in using the updated version with the graphics overhaul. You can change that in the launcher. But if you found Something that works then you rock it.
One thing often useful (particularly for older games) is support for more video codecs. Due to licensing, valves proton supports less video codecs, which can sometimes cause cutscenes to be played as test-images instead.