That's a pretty nasty knot. There's clearly not enough wood on either the left hand side or the right hand side to completely remove the knot. Sometimes you can pass on one side of the knot, but not this time. That means the knot will still be in the finished bow. Not a problem in itself.
I'd leave the bow pretty much the width you've sketched onto the back. You could maybe narrow the limb 1/4" at the knot. About one inch past the knot, you can start tapering the tip to a normale tip width. Tiller the knot so it's stiff. You can rasp the knot itself down a little, I think. It's now a big bulge on the back of the bow, which can become a little bulge. It takes little extra thickness to leave the knot stiff. I'd personally largely ignore the knot on the belly side. I'd compensate by extra thickness on the back (and possible extra width on the sides), but not extra thickness on the belly.
Leaving the knot big at first, might be handy. Floor tiller the rest of the limbs, so you can see what dimensions the rest of the limb should become, more or less. Then reduce the knot to get close to the final dimensions.
By the way, the wood species hardly matters when it comes to treating knots.
