I understand that a SOCKS proxy only establishes a connection at the TCP level while an HTTP proxy interprets traffic at HTTP level. Thus a SOCKS proxy can work for any kind of protocol while an HTTP Proxy can only handle HTTP traffic. But why does an HTTP Proxy like Squid can support protocol like IRC, FTP ? When we use an HTTP Proxy for an IRC or FTP connection, what does specifically happen? Is there any metadata added to the package when it is sent to the proxy over the HTTP protocol?
HTTP proxy is able to support high level protocols other than HTTP if it supports CONNECT method, which is primarily used for HTTPS connections, here is description from Squid wiki:
The CONNECT method is a way to tunnel any kind of connection through an HTTP proxy. By default, the proxy establishes a TCP connection to the specified server, responds with an HTTP 200 (Connection Established) response, and then shovels packets back and forth between the client and the server, without understanding or interpreting the tunnelled traffic
If client software supports connection through 'HTTP CONNECT'-enabled (HTTPS) proxy it can be any high level protocol that can work with such a proxy (VPN, SSH, SQL, version control, etc.)