I don't really understand your question. Fiddler is non-malicious, if that's what you're asking. Generally speaking, Fiddler shows traffic from your local computer only, not from "embedded devices" so it sounds like maybe you've set some other configuration? If you were to run Fiddler on a public IP and allow arbitrary connections, then Fiddler could serve as a proxy for anyone who chose to use your IP as a proxy, but you'd see their traffic inside Fiddler itself.
If you have a PCAP of the traffic in question, please feel to email it to me using Help > Send Feedback inside Fiddler and I'll have a look upon my return to the office.
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