Moving from Form to Function.
Up to this point on the module, a lot of time and energy has gone into developing an idea conceptually. It is vital that your productions go through a robust "proof of concept" process to ensure that the idea is strong, the visual investigations (concept art/designs) are appropriate to the story you are telling, and the ideas you are communicating.
At its best, the design phase allows a little space to consider a couple of options in terms of your character design/art direction before deciding on and developing the direction that most compliments your idea or message. At level 2, your early design/prototyping/testing work should challenge your existing technical knowledge and skill, while demonstrating an informed yet original visual approach.
At its worst, the design phase is a knee jerk and ever so slightly panicked reaction to the need to visually communicate your unformed idea to others.
Moving from concept to practical process is often the step that pushes the designer the most. As soon as you begin to animate a design it will naturally adapt and change. Where a production lacks a strong design statement or "Manifesto" from the start you run the risk of weak or poorly considered design becoming more bland and generic.