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Is that the actual failure?  HEAD requests are used to check for existence; often they are informational messages.  What does the full failure output look like?

we are using an internal proxy that returns 401 in this case, but the proxy gets a 404 from central

would gradlew handle the 404 differently from the 401?

Yes.  Those are very different errors - 404 is not found, which may be expected for a HEAD request.  401 is an unauthorized error.  Suggest checking whether your proxy requires authentication and if Gradle is configured to provide that.