A bullet will sometimes flatten, or in the least, distort when hitting/entering a tree, it depends on the angle of strike.Yours seems to be parallel to the grain which tells me something was stuck/pinned on the tree and the tree has grown round it.
At one on our village shows a few years ago (Heckington) there was some 'wood' guys with a lump of trunk on display which, when put through the mill, revealed a shovel, the blade had missed it by millimeters, the complete shovel was still in it, the tree had grown round the shovel, you will find bit's of barbed wire sometimes in the middle of a tree.
Andy