I understood the word bulkhead to mean a structural wall or barrier, particularly relating to naval architecture. I am now seeing the term applied to certain interior design treatments where box shaped protuberances or recesses are made to a ceiling for decorative purposes. I can see how such decorations may be called bulk as they tend to be large and blocky and they tend to be at or above head height, but it seems to be a very odd appropriation of the word. Can anyone explain how this came to be?
The "bulkhead" is the head/face/top of the "bulk", the cargo or the area that would/could contain the cargo: https://en.wiktionary.org/wiki/bulkhead
"Everything comes to a head".
It's not necessarily that they're "bulky" or "blocky", but that they cordon-off the bulk -- the material, cargo, whatever -- in the case of keeping it stable during movement or to prevent flooding and such. If a ship is at risk of flooding, creating sectioned compartments can potentially contain the water to the section where it is coming-in, and provide more opportunity for repairs or for abandoning the ship as it will take longer to flood and sink, since each "bulkhead" would need to be breached for the flooding to continue throughout the ship. Same as with flooding, you can think of the inverse with an airplane, where you want to keep air pressure in the plane, but if there is a break in the hull, sectioned regions (separated by the bulkheads) would potentially prevent the depressurization, at least long enough for emergency actions to take place.
For interior decorating, it's not so much the "blockiness", but the idea of creating sectioning in a space: https://www.ceilingsandwalls.com.mt/info-ceiling-bulkhead
The ceiling "bulkheads" are recesses, butresses, sconces, levels, or sculptures that create the visual/architectural effect of something akin to a "bulkhead". Design, for the artistic sake, can take from functional design ideas and create purely decorative design concepts. For naming purposes, it sounds kinda lame to just say "big blocky ceiling thingy", but it sounds purposeful and important and referential when you call it a "recessed bulkhead" or "lighted kitchen-island with a floating bulkhead". They're features that, if only illusorily, create separation in the architectural space.