I want the ability to create our own functional area and hide the out of box one from the Development staff.

If you grant any of the tasks from the Constituent functional area on another custom created Functional Area, the user will have access to both Functional Areas.  This is due to the way that the tasks and their underlying feature permissions are tied to those Functional Areas.  You do have the option to completely remove the functional area for all users but it is not possible to remove it only for a specific group if you are granting Tasks that also exist in other Functional Areas.

Reason for this is to make this simpler for the development staff.  They don't want to spend there time remembering which functional area to go to when they just got down with a interaction and they would rather spend there time out with donors