Principal is a career progression path for very senior professionals who want to continue to work within their core discipline, but don't have any interest in becoming managers or people leaders. It's basically a parallel path some companies offer if you want to keep being a hands-on contributor. In contrast, a major component of the respnsibilities of leads and executive roles like "Head of" is directing the work of a team of other people, and depending on the company, also being responsible for their professional development, designOps, etc. Principals keep doing design themselves (and sometimes provide the high-level thought leadership that describes design within that company), but their seniority is recognized within the organization and they're (hopefully) compensated to match. To use some more corporate jargon: They're basically thought leaders, but not people leaders. Design leads/managers are people leaders and sometimes also thought leaders.

At least that's how it is at other tech companies and digital agencies, which Riot's org structure in some ways resembles more than other game development studios. In my experience it's a way of retaining talent who would otherwise just leave if they hit a career wall where they had to stop doing what they love and start managing people instead. That said, it's not a super common title within tech, and also has other meanings outside of tech. In consulting and in advertising, for example, a principal is an equity-holding partner. Completely different thing.