I decided to make something of this tree. This has been enough procrastination for 'experiments'. The first part of this process was a slanting chop of the upper trunk, that revealed some interesting physiological features.
My photos of the part I removed show the fine detail better. It may help to maintain your orientation to recall that this surface mated to the one shown above.
Even though the xylem is cells whose walls have been made into cellulose and then emptied out to transport water, each lumen has a living neighbor cell. These living cells are arranged in rings and rays (along a radial line). These living cells make the wood lightly colored or white-ish = live wood. Where these cells have died, the wood is darker = dead wood.
Each growing season, the cambium cells divide most become wood on the inside of the line of cambium 'stem cells', some become phloem (aka inner bark) and then bark (dead phloem and cork cells) to the outside. As we all know, this produces annual growth rings. I have identified the three growth rings since the die back occurred in the annotated photo.
To grow more wood, there must be a layer of cambium cells on top of the old wood and phloem to supply the photosynthates to make into cellulose (and for the cells to metabolize to make this all happen). In these cross-sections, I think it becomes obvious that the 'lip' doesn't roll or slide across the wound, but grows across in the same fashion as the stem thickens.
This also shows that the dead wood is not repaired/regrown - in other words it does not heal. The damage is just left in situ (compartmentalized) and what we call 'healing' is really just growing new wood that may happen to cover the dead stuff (which is in the slow process of decaying).