They redefined handmade or change the legal definition of a word to suit themselves. I believe they wanted to make more money so they decide to change their site TOU(Terms of Use) to reflect the new influx of sellers with commercial items that drop ship form foreign countries.

https://www.etsy.com/help/article/483
quote from Etsy's blog "HANDMADE items are designed and created by the shops that sell them. Because transparency matters on Etsy, we ask sellers to list shop members and share information about manufacturers involved in creating their items."
I certainly can not speak for all of the sellers on Etsy. I can speak for myself and the friends I have made there. Yes I still know a handful of handmade shops on Etsy. Most I know have left the sinking ship.
As I used the site search by topic, key work and tag , I noticed hundreds of pages of items that were not handmade. I started to discuss this on several of the teams I belonged to. My discovery of the commercial items was not unique. We being good site members reported the shops to the site as not in compliance with their TOU. We waited a few days then weeks and the odd thing was the shops were still there. In one case, the shop was on the front page of the handmade section. Many sellers had gone to other sites as a back up plan because they were afraid the buyers would leave Etsy.
I have a great group of friends and small business people I have became close with in the past few years. We are online promoting each other through social media. The group is Sellergroup. We are a group of handmade, vintage and supplies buyers and sellers. Please follow these links to learn about us.
Sellergroup Pinterest
There are many sites the Hand made sellers have moved to. I have tried several sites myself and now use my stand alone website as my main place I sell my work. Here are a few of the options my friends have chosen: Zibbet, Artfire, Indymade, Shopify, Bonanza, SupaDupa, Ebay, and Facebook groups.
To expand the audience of my sales and increase my customer base, I even tried selling jewelry supplies. I listed my extra beads as destash supplies on Etsy. The majority of my sales were during buying blitzes with the teams I was part of. The impact has not been positive for myself, my sales or the majority of the seller of handmade I know. This all began in 2012 when the site redefined handmade.
Hopefully you understand why many of us handmade artist have left Etsy. Feel free to do an Internet search on Etsy, their stock and re-sellers (commercial items) to learn more.
My shops: Panda Wear Website
Cabochons and Supplies
Facebook: PW Facebook
Twitter: Panda Wear Gems