Comment 8 for bug 1505670

I believe this is fixed in eoan at least:

root@eoan-squid-deb-proxy-clienbt:~# rm -f errors.txt
root@eoan-squid-deb-proxy-clienbt:~# /usr/share/squid-deb-proxy-client/apt-avahi-discover 2>errors.txt
http://10.0.100.99:8000/
root@eoan-squid-deb-proxy-clienbt:~# cat errors.txt
Failed to resolve service 'Squid deb proxy on eoan-squid-deb-proxy2' of type '_apt_proxy._tcp' in domain 'local': Timeout reached
root@eoan-squid-deb-proxy-clienbt:~#

apt update works just fine, but it spits out the error, as mentioned in comment #3:
root@eoan-squid-deb-proxy-clienbt:~# apt update
Failed to resolve service 'Squid deb proxy on eoan-squid-deb-proxy2' of type '_apt_proxy._tcp' in domain 'local': Timeout reached
Hit:1 http://archive.ubuntu.com/ubuntu eoan InRelease
Hit:2 http://archive.ubuntu.com/ubuntu eoan-updates InRelease
Hit:3 http://archive.ubuntu.com/ubuntu eoan-backports InRelease
Hit:4 http://archive.ubuntu.com/ubuntu eoan-security InRelease
Reading package lists... Done
Building dependency tree
Reading state information... Done
4 packages can be upgraded. Run 'apt list --upgradable' to see them.

Same in xenial, so I'll assume the versions in between are also ok:root@xenial-squid-deb-proxy-client:~# /usr/share/squid-deb-proxy-client/apt-avahi-discover
Failed to resolve service 'Squid deb proxy on eoan-squid-deb-proxy2' of type '_apt_proxy._tcp' in domain 'local': Timeout reached
http://10.0.100.99:8000/
root@xenial-squid-deb-proxy-client:~# /usr/share/squid-deb-proxy-client/apt-avahi-discover 2>/dev/null
http://10.0.100.99:8000/
root@xenial-squid-deb-proxy-client:~#

root@xenial-squid-deb-proxy-client:~# apt update
0% [Working]Failed to resolve service 'Squid deb proxy on eoan-squid-deb-proxy2' of type '_apt_proxy._tcp' in domain 'local': Timeout reached
Failed to resolve service 'Squid deb proxy on eoan-squid-deb-proxy2' of type '_apt_proxy._tcp' in domain 'local': Timeout reached
Hit:1 http://archive.canonical.com/ubuntu xenial InRelease
Hit:2 http://br.archive.ubuntu.com/ubuntu xenial InRelease
Hit:3 http://br.archive.ubuntu.com/ubuntu xenial-updates InRelease
Hit:4 http://br.archive.ubuntu.com/ubuntu xenial-backports InRelease
Hit:5 http://br.archive.ubuntu.com/ubuntu xenial-security InRelease
Reading package lists... Done
Building dependency tree
Reading state information... Done
All packages are up to date.
root@xenial-squid-deb-proxy-client:~# echo $?
0
root@xenial-squid-deb-proxy-client:~#