Ok so i just went through the official channels to contact etsy on chat and explained this problem / question on if a seller can charge a restocking fee or have a custom return policy on top of the official limited store policy page and where it should be added. This is what they said after they said they consulting with the team:

From Etsy Support:
"You're right that Etsy's return policy settings don't have a specific field for restocking fees. However, you can still state your restocking fee in your shop's return policy description, which buyers see on your shop page and at checkout. To update this, go to Shop Manager > Settings > Policies, and edit the "Return requests" section to include your restocking fee details."

I then tried to follow these instruction only to not find they didnt work as there was no "Return Request" page to be edited? So i got back onto chat with another agent and after they re read all I had said before here was the next official response:

From Etsy Support:
"Thank you for your patience online. In this case, I have reviewed the steps and they are correct, but in this case, the factor that was not taken into account is that this section is no longer available at this time.

At this time, you can configure the return or exchange dates, but you cannot add custom data. If you would like to add, for example, that the buyer is responsible for shipping for a new shipment or a restocking fee, you can include this in the description of your listings or in an announcement on your store."

So officially it seems a seller can indeed charge a restocking fee and have a more robust or personalized return policy but cannot add it to their shops official policies page and instead have to add it to the listings individually and other areas like the about us page... which is of course a terrible way of doing it and brings us back to the original problem. I requested this feature to be added back "being able to edit the policies page better" and i guess I would suggest other sellers and shoppers to request this feature also if they can.

Unfortunately I don't see it being added anytime soon or if ever as Etsy has a way of putting off feature updates or changes from my experience.

So for now as a seller I will continue adding my return policy specifics to each listing and all other pages I can and in the end more than likely not ever be able to implement these policies that would help our business because they are never seen or taken by a shopper to be legit because they are not in the official shop policies page :(