If anybody lands a hit on you, and you disappear they get credit (they were the last to engage you in combat, their rounds were the only ones to hit you, therefore they "shot you down" in some way).
Otherwise, the proxy issue is a range-specific thing. It's only inside a certain range. If you never took any hits, and nobody is around, you die 3 times [edit: assuming a bomber formation] but no credit is given. If somebody is close enough, the credit is given to them.
It's not a big deal, really it's not. No points are awarded, just the recognition in the kill buffer.
It's as legitmate as any other kill, as well. There are a number of times when somebody is running from a fight and hits a tree. They were in combat... They hit the ground. They were flown into the ground in panic. Any fighter in WW2 would have reported it for credit.
Or the stall fights that spiral from 20k to the deck, end up in rolling scissors, fighting the stall, and maybe 1 guy, after a VERY hard fought run, stalls out at 50 feed and crashes. Both pilots would consider the survivor the "winner" and that he was victorious in that combat. He fought the enemy to death, despite never landing a shot.
Proxy kills are there for a reason. Just don't bail if you don't want to give them out. It really doesn't come up all that often for me.
