The correct option is B Bases of the branches get buried in main stem
A knot is a particular type of imperfection in a piece of wood. It will affect the technical properties of the wood, usually for the worse, but may be exploited for visual effect. In a longitudinally sawn plank, a knot will appear as a roughly circular solid piece of wood around which the grain of the rest of the wood flows. In the tree, a knot is either the base of a side branch or a dormant bud. A knot (when the base of a side branch) is conical in shape with the inner tip at the point in stem diameter at which the plant's vascular cambium was located when the branch formed as a bud. During the development of a tree, the lower limbs often die, but may remain attached for a time, sometimes years. Subsequent layers of growth of the attaching stem are no longer intimately joined with the dead limb, but are grown around it. Hence, dead branches produce knots which are not attached and likely to drop out after the tree has been sawn into boards. So, knots are formed in the wood due to bases of the branches get buried in main stem and not due to external injuries, leaf scars or insects bites.
Thus, the correct answer is option B.