Design: settings story (local.settings.json / .env / app settings)

v5 inherits multiple competing settings sources (`local.settings.json`,
`.env`, app settings synced from Azure, CLI config). Design the unified
settings model: precedence, command surface, secret handling, and the
relationship to `az` app settings sync.

## Definition of Done

- [ ] Design doc landed in `docs/proposed/` covering: source precedence,
`func settings` command surface (add / list / delete / encrypt /
decrypt or successor), secret handling, and `.env` support.
- [ ] Decision recorded on whether v5 adopts `.env` as a first-class
source or stays `local.settings.json` only.
- [ ] Decision recorded on how Azure app settings sync works in v5
(`func azure fetch-app-settings` or successor).
- [ ] Follow-up issues opened for each implementation slice.
- [ ] Doc reviewed by host team + at least one PM.

Start with the proposed design document location, docs/proposed/, and use the listed sources—local.settings.json, .env, Azure app settings, and CLI config—as the comparison points. Define the settings model and review the func settings and func azure fetch-app-settings command surfaces named in the issue. Done means the required decisions, follow-up issues, and host-team and PM review are recorded.

Written by the indexing model from the issue text.