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> such that only the client and app server can see plaintext, and the relay sees only a jumble of ciphertext. A “gateway” sits between the relay and app server to handle all of this cryptography — decapsulating requests, encapsulating responses — and the app server handles only plain HTTP

Wouldn't that be better if you design an oblivious encryption method so the encryption and decryption is handled by the origin server (a.k.a Target Resource in the RFC) and the Client? Instead of letting anyone in the middle to handle that data?

Their current design looked not that different than if you just connect to a public anonymous SOCKS5 server (which don't decrypt TLS traffic) and uses it to connect to a website hosted behind Cloudflare. It would probably work the same way too, since someone has to host a "OHTTP Relay" the same way they host a anonymous SOCKS5 server.

Nothing really prevents you from doing double encryption in OHTTP. The gateway decrypts once, and the origin (target resource) decrypts a second time. HPKE is a good choice to use for the inner layer.