Warm the milk to 110°F. In a stand mixer bowl, combine flour, sugar, yeast, and salt. Create a well and pour in warm milk, melted butter, eggs, and vanilla.
Mix on low speed for 2 minutes, then increase to medium and knead for 6-8 minutes until smooth, elastic, and slightly tacky. If mixing by hand, knead on a floured surface for 10-12 minutes.
Grease a large bowl, place dough inside, and turn to coat. Cover tightly and let rise in a warm spot for 1 to 1.5 hours until doubled in size.
Punch down the dough and turn onto a floured surface. Divide into 3 equal portions. Roll first portion into an 18-inch rope and cut into 5 pieces. Roll second into a 15-inch rope and cut into 4 pieces. Roll third into a 12-inch rope and cut into 3 pieces. Roll one small piece into a ball for the trunk.
Shape each piece into a smooth ball. Melt 1/2 cup butter in a small bowl. In a separate bowl, whisk together sugar and cinnamon. Dip each ball in melted butter, then roll in cinnamon-sugar until fully coated.
Line a baking sheet with parchment paper. Arrange the 5 largest pieces in a row at the bottom, place the trunk ball centered below, then arrange 4 middle-sized pieces in the second row and 3 top pieces in the third row. Ensure all pieces are touching.
Cover the arranged tree loosely with plastic wrap or a clean kitchen towel. Let rest in a warm place for 30-45 minutes until puffy. Don't let it over-rise.
Preheat oven to 350°F. Remove covering and brush exposed areas with melted butter if desired. Bake for 23-27 minutes until golden brown and internal temperature reaches 190°F. Tent with foil if browning too quickly.
Cool on baking sheet for 5 minutes, then transfer to a serving platter. Dust generously with powdered sugar while warm. Tuck rosemary sprigs around the base and scatter pomegranate seeds as ornaments. Serve immediately.