Walnut seems to be tolerant of ring violations, sort of like I’ve seen people do with yew. Though with knots it’s typically best to follow the swirl of the grain around the knot, whichever direction it goes around it. Think of the grain as water flowing in a river and t he knot is a rock. Just follow where the flow goes and you’ll be fine.
Depending on the width of the stave, it looks like you can just avoid the knot on the back. As long as the grain on the back is clean of the knot, I’ve never had an issue with a knot like that coming out the side of the limb.
My vote goes to making the limb enough narrower to remove the knot from the back (especially if you have t he width available) and ignore what it’s doing on the belly, as long as it’s solid and doesn’t act like it’ll want to pop out.
Kyle