Host masking (Proxy) in Nginx

Question

I am kinda new to Nginx. I am trying to create a reverse_proxy server. I have XAMPP running on localhost:8080 and I run Nginx on example.test:80 I don't want the URL to change on the client-side (in the browser) but no matter what I try, it keeps changing it. I somehow managed to keep the host as example.test but still the port changes to 8080 (which doesn't make any sense as I can access the XAMPP with example.test:8080 without nginx)

events {}

http {
    server {
        listen 80;
        server_name example.test;

        location / {
            proxy_pass http://localhost:8080;
            proxy_set_header Host $host;
            proxy_set_header X-Real-IP $remote_addr;
            proxy_set_header X-Forwarded-For $proxy_add_x_forwarded_for;

            # Preserve original request URI and scheme
            proxy_set_header X-Forwarded-Proto $scheme;
            proxy_set_header X-Forwarded-Host $host;
            proxy_set_header X-Forwarded-URI $request_uri;

            # Mask the URL on the client side
            proxy_buffering off;
            client_max_body_size 0;
            proxy_read_timeout 36000s;
            proxy_http_version 1.1;
            proxy_request_buffering off;
            proxy_connect_timeout 5s;

            # Rewrite rule to remove the port number from the URL
            rewrite ^/(.*)$ $scheme://$host/$1 break;

            # Add the following line to preserve the server_name in the client's URL
            rewrite ^/(.*)$ /$1 break;
        }
    }
}

Also, if I access example.test without mentioning any path, it works perfectly. But as soon as I add a path like example.test/new, the URL in the browser changes to either localhost:8080/new or example.test:8080/new.

I just need localhost:8080 to be example.test in the browser. Can someone tell me what am I doing wrong here?