I thought it was some sort of fungus, because it does seem to be growing out of the tree. The thing it's attached to doesn't look much like a tree though either, compared to the other trees it's light colored and straight while the others are brown and gnarled. Also I'd like to point out that when we pan up the hill, you can see gravestones and if you watch it frame by frame you can see sculptures of their heads ingraved on the top of the flags. Stranger is obviously at the bottom of the hill when we see him load his bow in the dark.
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