CF does not have the knowlege about the content and structure of the website or about typical behavior, so they lack a lot of options to identify patterns. That's why CF does - as it has been written in this thread for months - often fail to identify those proxies reliably. CF has the advantage of high numbers, so they can identify suspicious IPs by i.e. the behaviour of sending single requests to vastly different websites within short time - but again this does work only after some time.
They may (and hopefully will) have improved their abilities over the last months - but as it has been written in this thread in the past it is not reliable and, within the product range of CF, the free tier will probably not offer protection. The proxy providers advertise a success rate of 99+% and science says only 10% of the resident proxies get identified.
Although CF "out-of-the-box" doesn't do anything particularly 'intelligent' with requests from residential proxies, by looking at the web server logs for stuff that is getting through, it's possible to add additional mitigation to Cloudflare rules, even on the free level.
At the moment, a lot of the traffic I'm seeing from residential proxies is extremely simple - in some cases to the point of being a bit bizarre.
For example, looking at our XF "guests" page, a large majority of the guests are "Viewing an error page" - from the web logs, these are typically 404s for requesting non-existent things in the image/link proxy. Similarly, I see lots of requests to attachments, goto/post and reactions with either no referrer or one which cannot be correct (e.g. root URL as referrer when our forum is not in the root). No genuine web browser would make these requests, and generally they're not interesting to genuine search indexers.
Use CF security rules to issue a "managed challenge" to these requests and it takes quite a lot of bot traffic out, with a completion rate of 0.01%
e.g. last 24 hours:

This is probably more effective than trying to whack-a-mole on individual residential proxy IPs - we get 300,000+ "Unique Visitors" per day.
CF also makes it easy to block/challenge countries and ASNs, so the traffic from "bad actor" data centres is also massively reduced.
Even then, we still hit our largest number of "visitors online" (15,000+) in the past week.
There's not going to be one solution, it's probably going to take a combination, plus an acceptance that it's not actually a battle we can win - we put content on the web, people will steal it - it's always been the case. Hiding more content behind registration/login will impact SEO and lead to a drop in positive activity.