I don't have any experience with osage. But since I don't see a marking of the knot on the back of the bow, it must be a loose knot and new rings have grown on top of it. I'm inclined to remove the dark, rotten wood. It'll probably fall out half way through the process. You can leave the cavity (I think it's cool) or fill it with a glue/osage dust mixture. It appears to be in a non-bending section of the fade anyway.