I *think* it just pops up a new window in an existing Chrome, but I am not an expert for that. A separate --user-data-dir might avoid that, but it might also be kinda confusing.

There also seem to be policies that let one exclude some hosts from proxying which may be a better option:
https://www.chromium.org/administrators/policy-list-3#ProxyBypassList

Thank you for the suggestion. I can surely try this one as a work around. 

But the reason we were avoiding the list was because apart of the core url there are a lot of other urls that get used and getting that list across the enterprise is a tough one and there are always additions and deletions. 

If the new instance of chrome works independently in the arguments sent that will do the trick. 

You can't open two instances of Chrome using the same user profile - sharing cache and cookie files, for instance, just wouldn't work at all.  This sounds to be working as expected.

Adding eroman@ to comment on potential workarounds.

Comment #1 is correct. Launching Chrome with different command line flags does *not* result in a new instance of Chrome.

Your options are either to first exit all running instance of Chrome and then launch with new command line flags, or use --user-data-dir to run parallel instance of Chrome with different command line options (and different profiles)

For details on --user-data-dir see https://chromium.googlesource.com/chromium/src/+/HEAD/docs/user_data_dir.md. If you do go that route, you will need to use a unique user-data-dir for the alternate options mode.

There are a plethora of other ways to configure proxy; the command line approach seems ill-suited for your use-case. I would instead suggest configuring separate Chrome profiles, and having different proxy settings within them (both residing in the same user-data-dir). Or using an extension to toggle between the no-proxy and proxy modes.

Thanks you all for the responses will try that.