Proliferate X times is just a silly line of text, even if theres a real stipulation in place to enable it
They see only vague shapes rustling behind the leaves, which is represented in game by the disguise mechanic, letting all sorts of creatures sneak up on opponents
If it has been discarded from your hand, milled from your deck, or killed off the battlefield, you need to return it to your hand to have the option for the adventure
Add in Ward 2, lifelink, and the fact that the ability can scale up or down with your mana, and you've got one of the meanest disguise creatures to come from Karlov Manor

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Izzet Dragons ultimately thrived specifically because it had access to cheap ways to replenish those resources