Renowned New York fashion designer Regine Traulsen, famed for her elegant caftans and lavish Moroccan-style celebrations, has sold her Palm Beach mansion for $16.175 million. The property, which has been a cherished homestead residence for Traulsen and her husband William J. Diamond—a former New York City Town Council member and administrative services head—has seen a remarkable increase in value, having more than quadrupled since its 2004 purchase.…