I agree completely. That's where the fuzziness comes in. How something works is part of the design. It's also part of the development. It's also part of strategic business decisions (in scoping especially so). I'd put the user story and experience work more in design and product camps than in development. But the architecture for translating that into something that's interacted with is then dev or engineering, which also has overlap into design and finance and other areas. The output of that then leeches into design and business analytics and finance and so on.

My contention isn't that design is relegated purely to making stuff pretty, but rather that, just as design is more than that, so is dev and so is business strategy and everything else. It's hard (and indeed counter-productive) to compartmentalise any specific discipline.