Just FYI, our customers that use MDM software to apply similar web content filters get the same issue.
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We are experiencing the same exact issue with our application and have also reported it through Feedback Assistant FB12119649. For us it is reproducible in 16.4 as well and also with any setting under Web Content restrictions other than the Unrestricted setting. We also tried adding all of our URLs for our web app to the allowed list and it does nothing.