"SD" is short for "settings data". It was one of the placeholder names for the settings resource that is used in several mockups to represent a settings resource. In the early days of Redfish, we noticed several implementations copied that pattern from our mockups.
No, it's not deprecated. There were requests made to standardize on some recommended values for the last segment of the settings resource. Since both "SD" and "Settings" were fairly common in implementations we've seen, we gave the guidance to use one of the two.
Keep in mind, it's a "should", so it's not mandatory to use one of the two; you can use whatever you want for the last segment and still be conformant with the specification, but it's a good idea to use either "SD" or "Settings" to follow the recommendation.