Net flows. A residential proxy should have a residential amount of traffic coming from it. If one IP has 1000x the usual traffic one household could reasonably account for, then mark it as a residential proxy. It won't be 100% accurate, but it's sufficiently accurate for reddit to go on a blocking spree.

Our detection model at ipinfo is largely based on behavior models of IP addresses. We have 700 servers around the world from which we run internet measurement, allowing us to reliably determine which IP addresses are VPNs or proxies. These measurements are largely ping/traceroute data, which enable us to estimate a number of different things most importantly IP location data.

If you are interested in what kind of other information we can discover from our internet measurements, check out our tags page: https://ipinfo.io/tags