I remember reading a story that the original design actually came from a female designer and Miyazaki didn't have the heart to tell her to change it.
Edit: I misrembered the artist being a woman. Here was the excerpt from the interview:
Hatsuyama: Can I ask about Gwynnevere, because compared to the other female characters, she's very different, almost glamorous.
Miyazaki: You don't like the design?
Hatsuyama: No, I just wanted to know what the original idea behind her was.
Otsuka: As a fan of the character, I'd be interested to hear that too.
Miyazaki: The truth is that I just wanted to make a really big woman. I think it was a Fujiko F. Fujio manga, (Yasuragi no Yakta, literally "Mansion of Peace") in which there was a company president who works his staff to the bone in his work life, and there's this giant woman who takes care of the club members, almost like a mother... don't you think that's just a perfect situation? A giant, considerate, caring woman. The kind we all lost when we grew up; that's what I wanted to make. Originally I wanted to put a mouth in the palm of her hand and we made all of the animations, but it didn't make it into the final game. Talking of glamour, her breasts have nothing to do with me, they happened without my knowledge. It's all the artist's fault. I think I mentioned it earlier but I always seek a certain refinement in all my designs.
Waraga: Really?
Miyazaki: Yes, but the artist had such a happy look on his face, I didn't have the heart to stop him.