Reverse Proxy Forwarding Requests Using HTTPS Protocol

Question

I am using openresty as reverse proxy. Openresty uses Nginx as backend server. I have configured openresty with luajit so that I can use lua inside my proxy configuration in order to perform some business logic.

I want to forward all requests to the original URL, using the original protocol, i.e. using HTTP/HTTPS.

My proxy.conf is under /usr/local/openresty/nginx/conf/sites-available/proxy.conf and it is as follows:

  server { 
        error_log  /usr/local/openresty/nginx/logs/error.log debug;
        listen 1080 ssl;
        server_name localhost;
        ssl_certificate /usr/local/openresty/nginx/ssl/localhost.crt;
        ssl_certificate_key /usr/local/openresty/nginx/ssl/localhost.key;

        ssl_protocols TLSv1.2 TLSv1.3;
        ssl_ciphers 'TLS_AES_128_GCM_SHA256:TLS_AES_256_GCM_SHA384:TLS_CHACHA20_POLY1305_SHA256:ECDHE-RSA-AES128-GCM-SHA256:ECDHE-RSA-AES256-GCM-SHA384';
        ssl_prefer_server_ciphers off;

        location / {
                    access_by_lua_block { -- some irrelevant business logic
                    }

            #USING google as dns 
            resolver 8.8.8.8;

            proxy_pass $scheme://$host$request_uri;        
        }
    }

my SSL certificates are self-signed, generated using openssl, for my local host.

I am testing it in the following way:

curl -v -I -x https://localhost:1080 https://stackoverflow.com/questions/38371840/ssl-pass-through-in-nginx-reverse-proxy

I am getting this error.

*   Trying 127.0.0.1:1080...
* TCP_NODELAY set
* Connected to localhost (127.0.0.1) port 1080 (#0)
* ALPN, offering http/1.1
* successfully set certificate verify locations:
*   CAfile: /etc/ssl/certs/ca-certificates.crt
    CApath: /etc/ssl/certs
* TLSv1.3 (OUT), TLS handshake, Client hello (1):
* TLSv1.3 (IN), TLS handshake, Server hello (2):
* TLSv1.3 (IN), TLS handshake, Encrypted Extensions (8):
* TLSv1.3 (IN), TLS handshake, Certificate (11):
* TLSv1.3 (IN), TLS handshake, CERT verify (15):
* TLSv1.3 (IN), TLS handshake, Finished (20):
* TLSv1.3 (OUT), TLS change cipher, Change cipher spec (1):
* TLSv1.3 (OUT), TLS handshake, Finished (20):
* SSL connection using TLSv1.3 / TLS_AES_256_GCM_SHA384
* ALPN, server accepted to use http/1.1
* Proxy certificate:
*  subject: CN=localhost
*  start date: Sep  5 09:31:24 2023 GMT
*  expire date: Oct  5 09:31:24 2023 GMT
*  subjectAltName: host "localhost" matched cert's "localhost"
*  issuer: CN=localhost
*  SSL certificate verify ok.
* allocate connect buffer!
* Establish HTTP proxy tunnel to stackoverflow.com:443
> CONNECT stackoverflow.com:443 HTTP/1.1
> Host: stackoverflow.com:443
> User-Agent: curl/7.68.0
> Proxy-Connection: Keep-Alive
>
* TLSv1.3 (IN), TLS handshake, Newsession Ticket (4):
* TLSv1.3 (IN), TLS handshake, Newsession Ticket (4):
< HTTP/1.1 400 Bad Request
HTTP/1.1 400 Bad Request
< Server: openresty/1.21.4.2
Server: openresty/1.21.4.2
< Date: Tue, 05 Sep 2023 16:48:44 GMT
Date: Tue, 05 Sep 2023 16:48:44 GMT
< Content-Type: text/html
Content-Type: text/html
< Content-Length: 163
Content-Length: 163
< Connection: close
Connection: close
<
* Received HTTP code 400 from proxy after CONNECT
* CONNECT phase completed!
* Closing connection 0
curl: (56) Received HTTP code 400 from proxy after CONNECT

Is this due to self-signed certificates? or am I missing something?