I do any thing I can to save an Osage stave even if I end up with a short horse bow, but some staves are just not going to make a bow. This may ,or may not be one of them. I have over the years wasted a lot of time ,and effort working with bad staves only to have them fail at some point. If you have ,40 or more inches of stave left I would cut the knot out, and make a short bow, or set that one aside for now, and get a nice ,clean knot free stave, and do your build. Good luck.