Almost reaching 300K distinct bot IPs
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Blocking IPs been flagged as residential proxies only on this criteria is indeed risky and can lead to false positives. Indeed, these IPs may be (heavily) shared. That's a criteria you can take into account to block/challenge (e.g. with a CAPTCHA, 2FA on login) traffic.
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The best is to combine this signal with others, e.g. server-side fingerprint, browser fingerprint, behavior, country etc
It enables to significantly decrease false positives all while keeping a good level of protection