Starting from AEM 6.4, /etc/design is not used like it was in previous versions of AEM. As per repository restructuring guide [0], you need to move /etc/design to the following:
/apps/settings/wcm/designs/<project-name>
For any Designs that are managed in SCM, and not written to at run-time via Design Dialogs.
- Copy the designs from the Previous Location to the New Location (/apps).
- Convert any CSS, JavaScript and static resources in the Design to a Client Library with allowProxy = true .
- Update references to the Previous Location in the cq : designPath property.
- Update any Pages referencing the Previous Location to use the new Client Library category (this requires updating Page implementation code).
- Update AEM Dispatcher rules to allow the serving of Client Libraries via the /etc.clientlibs/.. proxy servlet. See [0] for more details.
[0]: https://docs.adobe.com/content/help/en/experience-manager-65/deploying/restructuring/all-repository-restructuring-in-aem-6-5.html#default-designs
Hope this helps!!