First let me be clear to all who are following this thread - I am not an expert at sinew backed yew bows. In fact, this is my first sinew backed yew bow. Regarding the question of the sapwood - my research was inconclusive on this point. I do, however, have the benefit of having an example of a well known bowyer's work in my possession. The bow was broken when the owner over-drew it (the bow is 48" and was pulled to 30"). Because the bow is broken I've been able to deconstruct it to learn something of how it was made. On this bow the bowyer left a very thin layer of sapwood under what appear to be 2 courses of sinew. I let this inform my decision to leave the sapwood on.
I also want to clear up any confusion as to how many courses of sinew I applied to this bow. I applied 2 1/2 courses of sinew, but I applied all the courses on the same day. I saw no particular advantage in waiting for the sinew to cure between courses, and evaluating the result now, I still don't.
I don't believe the edge knot will cause me any problem based on prior experience with similar knots, but if it does start to act up, I am prepared to wrap it.
It remains to be seen if these decisions are wise and I expect I will have my answers soon as I begin the tillering process.
Thank you all for your comments and for following this thread.