Are you reviewing the right extension? There are two versions of this extension, one which is intended only for Android. Since Android is unable to use Container Tabs, the I2P Proxy extension sets the proxy globally and with a separate Firefox is indeed the recommended way to use it. I'd really like to deprecate this version of the extension but until the contextualIdentities API on Android matches the contextualIdentities API on desktop, this second, inferior(Android) extension has to exist. If you have the option, the desktop version is the one which you should be using, and that one is called "I2P in Private Browsing" and is at version "1.26" right now. I don't think there's a way for me to mark the other extension(I2P Proxy for Android and Other Systems) as being installable on Android only, I tried to find one but I don't think it exists.

When I test the release version of the "I2P in Private Browsing" extension the behavior is as you recommend, the "I2P Browser" tab is proxied without any exemptions, dropping localhost addresses, and in the application containers the proxy is applied with a per-app exemption and dropping all non-app localhost addresses. This is exactly as intended as far as I can tell. Moreover my Discord container and my Google containers both work normally, and I don't appear to be using an outproxy to visit the web. I don't know why you would be experience this issue unless you got the Android-only version by accident.