In order to enable posting proposal and enable on-going work. Suggest to write them down under 'design/proposal/'. The work on the proposal and the on going changes will be done though PRs. Proposal can be closed and discard, accepted and committed to the main branch, or rejected. Rejected proposal will be moved into 'design/proposal/rejected'. Let me know what you think on the proposal proposal, to improve the current PR based solution.

Is there a possibility that in time the rejected proposals will cause bloating of the codebase?

Waiting for this to happen to handle this one issue

What will be the strategy in that instance? I'm guessing the reason to save the rejected proposals in the code is for reference, will we just delete them?

Delete the non relevant. Usually keeping rejected information is like keeping a product on side and say I'm out of stock. Just for reference and knowledge about ways we considered.