First, let us compute an auxiliary array $$$closest_{v, b}$$$ — the distance from vertex $$$v$$$ to the nearest vertex whose number contains the set bit $$$b$$$ ($$$0 \leq b \lt k$$$). We solve this independently for each bit. When we want to compute $$$closest$$$ for some particular bit, we run a multi-source BFS from all vertices that contain this set bit. Alternatively, this can be done using subtree DP. The complexity of this part is $$$O(n k)$$$.
Suppose we know the answer set $$$A$$$, and fix in it the vertices at maximum distance from each other. Let these vertices be $$$a$$$ and $$$b$$$. Call the path between these vertices the diameter, and let the length of this diameter be the number of edges in it (denote the length by $$$d$$$).
Let us consider two cases:
We process this case as follows. Fix a vertex $$$m$$$. Now we want to find the minimum $$$x$$$ such that if we take into the answer set all vertices at distance at most $$$x$$$ from $$$m$$$, then they will have the OR value we need. It is claimed that $$$x$$$ is the maximum value of $$$closest_{m, b}$$$ over all bits $$$b$$$. Thus, we find this $$$x$$$ and relax the answer with $$$2x$$$ (because $$$x$$$ is $$$\frac{d}{2}$$$).
Therefore, similarly to the previous item, we iterate over the edge $$$m_1, m_2$$$. Next, we want to find the minimum $$$x$$$ such that if we take into the answer set all vertices at distance at most $$$x$$$ from $$$m_1$$$ or $$$m_2$$$, then they will have the OR value we need. It is claimed that $$$x$$$ is the maximum value of $$$min(closest_{m_1, b}, closest_{m_2, b})$$$. We find this $$$x$$$ and relax the answer with $$$2x + 1$$$ (because $$$x$$$ is $$$\frac{d - 1}{2}$$$).
One can also avoid thinking about the second case separately as follows: add a dummy vertex with value 0 in the middle of each edge and solve the problem on this new tree. After this modification of the tree, the center of the answer diameter will always be a vertex, so one only needs to think about the first case.
The complexity of the second part is $$$O(n k)$$$, because we considered $$$O(n)$$$ candidates for the center of the diameter, and for each of them computed $$$x$$$ in $$$O(k)$$$.