Hey Dan,
I'm not Karl, but I can try and take a swing at telling ya why over sized and why dry.
Over sized because the wood will split and crack as it dries. Not to mention that the splayed part or decay as lumber inspectors call it is already unsound. By the time it dries, you will need some overstock to get to material sound enough to make a usable handle.
By the way, all wood is dead! It's kind of interesting. The only part of a tree that is actually alive and growing is the cambium layer just below the bark. Every thing else is dead. It's funny, a tree can be 4 feet thick and the only thing that's actually alive is a 1/8" ring around the outside. The other stuff is just hangin' around waiting to be lumber. ;~)
Ok, back to why dry it before you send it to be stabilized? Because it is wet! And the stabilizing process doesn't remove or replace moisture, just replaces voids in the cell structure.
Unless the wood is in a desert or Antarctica where the ambient moisture content of the air is like 12%, the wood will be at least 28-30% at the driest part of the year in most of America. Need to get out as much moisture as you can before you send it off to give the stabilizer more voids to fill and avoid trapping in water.
Oh, and I'd almost call it quilted maple, but not exactly. I've seen that come across my grading chain many times. Usually occurs around a branch fork where the bark collar was damaged for some reason I don't understand. Usually all black, wet and nasty down to the heart. Yuck!
It's cool looking stuff though. Burl in maple really adds a lot of character to what is an otherwise pretty straight forward wood.