"Tunnel Proxy" on k3s

k3s, k3OS, and k3d
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https://k3s.io/images/how-it-works-k3s.svg

I’m new to k3s and I am trying to understand it properly. How does the “Tunnel Proxy” element shown in above picture work in the Kubernetes and its Network Overlay context exactly? Is there any technical explanation on how exactly it works? (I am not familiar with Go.)
Is all the communication between server and agent proxied through a special interface?
Can a k3s Cluster behind a corporate proxy be connected to an outside Rancher instance?

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I am also new to k3s and trying to understand how proxy tunnel works in the k3s architecture. Any help is appreciated.

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