Ok, I solve my own problem, but this is something that other people with a similar infrastructure might run into.
IF you have a kubernetes cluster and that cluster needs to use a PROXY for external access such as downloading plugins when using the jenkins-operator to instantiate jenkins, you will possibly run into this situation. The Kubernetes Credentials Plugin is extremely finicky when it comes to proxy settings.
The proxy settings for Jenkins can be configured via ENV variables or via JAVA_OPTS. The Kubernetes Credentials Provider couldn’t care less about JAVA_OPTS, in fact, it couldn’t care less about canonical names such as kubernetes.default.svc either. Nope, it will only use the Kubernetes API Service IP. Therefore, the only way to get the Kubernetes service provider to work is to set HTTPS_PROXY, HTTP_PROXY, and NO_PROXY (all 3 must be present) and the NO_PROXY must contain the IP address of your Kubernetes API.