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While being connected on a very restricted network, I was only able to access the internet through a Squid proxy which was configured only for HTTP on port 80.

When navigating to google.com, I'm able to receive the site yet with no SSL on. I checked the HSTS record for google.com at chrome://net-internals/hsts and records exists.

So how come the site is still loading in browser and downgraded to http/80? It's the same as an MITM attack... I thought HSTS would block this.

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Proxy rewrite entirely the packets, so depending of proxy's configuration, anything is possible. So, the proxy is doing the ssl connection to the server and is serving you a non-ssl webpage. Maybe is only a cached webpage. Did you try to do some searches on google? Try to search something "weird" what it's suppossed to be uncached to sse if http remains, if yes, it confirms is not only cached web pages but sslstripping.

Is a trusted network? if not, don't surf the web there because your passwords and credentials can be intercepted in plain.

A proxy combined with DNS can bypass HSTS. It's called sslstrip2 or sslstrip+. Look at this or this

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