How to add pre-built "System App" in Android 12 AOSP

I was trying to add an AOSPHost.apk described here in AOSP android12.1.0_r24 as system application. I am building emulator with lunch argument sdk_car_arm64-userdebug. I have followed the procedure mentioned in the link, meaning:

1. I put apk in aosp_root/packages/apps/CarAOSPHost/AOSPHost.apk
2. Wrote Android.mk of AOSPHost.apk in /CarAOSPHost

LOCAL_PATH := $(my-dir)
################## Start of AOSPHost target ##################
include $(CLEAR_VARS)
LOCAL_MODULE := CarAOSPHost
LOCAL_LICENSE_KINDS := legacy_notice
LOCAL_LICENSE_CONDITIONS := notice
LOCAL_MODULE_OWNER := google
LOCAL_SRC_FILES := AOSPHost.apk
LOCAL_MODULE_CLASS := APPS
LOCAL_MODULE_TAGS := optional
LOCAL_MODULE_SUFFIX := $(COMMON_ANDROID_PACKAGE_SUFFIX)
LOCAL_BUILT_MODULE_STEM := package.apk
LOCAL_CERTIFICATE := PRESIGNED
LOCAL_PRIVILEGED_MODULE := true
LOCAL_PRODUCT_MODULE := true
LOCAL_DEX_PREOPT := false
include $(BUILD_PREBUILT)

4. Created permission file

<permissions>
    <!-- Rename the package to com.android.car.templates.host -->
    <privapp-permissions package="com.android.car.templates.host">
        <!-- To be able to display activities in the cluster -->
        <permission name="android.car.permission.CAR_DISPLAY_IN_CLUSTER" />

        <!-- To be able to show navigation state (turn by turn directions) in the cluster.-->
        <permission name="android.car.permission.CAR_NAVIGATION_MANAGER" />

        <!-- To be considered a system-approved host -->
        <permission name="android.car.permission.TEMPLATE_RENDERER" />
    </privapp-permissions>

    <!-- Declare support for templated applications. -->
    <feature name="android.software.car.templates_host" />
</permissions>

4. Then I add PRODUCT_PACKAGES in aosp-root/build/target/product/handheld_system.mk : this was recommended in Stack Overflow

5. Also, I included PRODUCT_COPY_FILES in aosp-root/build/target/product/handheld_system.mk for permissions

PRODUCT_COPY_FILES += \
    packages/apps/CarAOSPHost/com.android.car.templates.host.xml:$(TARGET_COPY_OUT_VENDOR)/etc/permissions/com.android.car.templates.host.xml

6. Then when I build, I get this error:

FAILED: 
build/make/core/artifact_path_requirements.mk:26: warning:  build/make/target/product/generic_system.mk produces files outside its artifact path requirement. Allowed paths are root/*, system/*
Offending entries:
product/priv-app/CarAOSPHost/CarAOSPHost.apk
In file included from build/make/core/main.mk:1342:
build/make/core/artifact_path_requirements.mk:26: error: Build failed.
11:24:21 ckati failed with: exit status 1

If it offends entries, how to add system app? or in which .mk file PRODUCT_PACKAGES should be added?

After some research, I found that PRODUCT_PACKAGES should be declared here /AOSP/packages/services/Car/car_product/build/car.mk