It is the only real, standards compliant way in which you can preserve client information (IP address, etc) while its moving inside a kubernetes cluster. Not all ingresses have support for injecting it. Most ingresses can read it (assuming a cloud based load balancer has inserted it already).
We had moved to haproxy for this reason.
Is Proxy Protocol different to making sure to add client information as an extra header?
At least thats what we normally do, we make sure that client information like the client ip are added as header filds which can easily be used in monitoring and co.
It wraps a TCP connection (not just HTTP) and forwards it, and preserves the originating IP information as a small header on the proxied connection.
It's supported beyond HAProxy, too; e.g., AWS ELBs support it. I've used it when forwarding TLS connections, but not wanting to lose the remote IP information. (And not wanting to decrypt on the ELB, which is required to add, e.g., an HTTP Forwarded-For header.)
If you add your header and the next hop is to apache or some other software (for e.g.), it won't know what you did.
Proxy protocol is a standard. Every software that supports proxy protocol reads and write it in the same way. This is supported outside of software. All clouds (AWS, GCP, Azure ) support it. So does third party services like Cloudflare - https://developers.cloudflare.com/spectrum/proxy-protocol