1. People willingly enter the pool and get paid for it. Some examples: Packetstream, Honeygain and EarnApp
2. So called "ISP" proxies, they're hosted in a data center but the IPs/connectivity are rented from residential ISPs and are basically indistinguishable from a regular residential IP.
The way the "legit" providers operate is by pitching a "get paid to share your unused bandwidth" spiel. Of course, it's highly unlikely that these users understand the full consequences of running a proxy, so I reckon it's still dodgy, kinda like predatory loans, MLMs and other "legal" schemes desperate folks fall for.
Now in theory there could be an operator that discloses all the risks up front, but I don't imagine they'd have many takers. Unless they pay really well (bearing in mind that "well" is very relative; 50c/GB in a third-world country can be decent money).
See: https://www.proxyrack.com/blog/5-best-data-selling-apps-to-e...