My server(UniPCemu's server build) currently uses ARP to detect conflicts with used addresses(and which ones are free when not responding and timing out a request).
It also performs an imitated ARP request from both the host and default gateway when it takes an IP and assigns it to itself for a client that's given said IP.

But I notice that often in the middle of a transfer from a website, the default gateway suddenly stops sending packets to the client?

Is there anything else required, other than responding to ARP requests? The simulated ARP as if from the default gateway and host seems to fix it to be compatible with when it didn't assign addresses using ARP, but why would the gateway stop sending incoming packets to the proxy server? Is there something else that's required for the connections to not be broken by the gateway, breaking connectivity until a new IP request is made(like loading a new page, which starts a new TCP/UDP connection)?