Combine warm water (105-110°F), sugar, and honey in a large bowl, then sprinkle the active dry yeast over the surface and let it sit for 10 minutes until foamy—this ensures the yeast is alive and active before mixing. Add 3 cups of flour, milk powder, salt, and the cooled melted butter, stirring until a shaggy dough forms. Gradually add the remaining 1/4 cup flour while kneading by hand for 8-10 minutes until the dough becomes smooth and elastic. The dough should be slightly tacky but not sticky; I find that kneading on a lightly floured surface helps develop gluten without adding too much extra flour.
Place the kneaded dough in a lightly oiled bowl, cover with a damp towel or plastic wrap, and let it rise at room temperature for 90 minutes until doubled in size. Once risen, punch down the dough gently and transfer it to a work surface. Roll the dough out to about 1/2 inch thickness, then cut it into 18 roughly equal pieces. Shape each piece into a tight ball by pulling the edges toward the center and rolling it on the surface to create tension.
Arrange the dough balls on a parchment-lined baking sheet in a triangle or Christmas tree shape, starting with a single ball at the top and increasing the number of balls as you move down to create the tree silhouette. Cover loosely with plastic wrap or a towel and let rise for 20-30 minutes until puffy and increased in volume. While the dough rises, crack the egg into a small bowl, beat it lightly with a fork to create an egg wash, and set aside.
Preheat your oven to 350°F. Brush the risen dough balls generously with the egg wash, making sure to coat each one evenly for a golden finish. Bake for 10-12 minutes, then carefully open the oven and nestle the mozzarella cubes into the gaps and tops of the dough balls—I like to press them gently so they stay put and melt into the bread. Return to the oven and bake for another 10-13 minutes until the bread is golden brown and the cheese is melted and bubbling.
While the bread bakes, melt 5 tablespoons of unsalted butter in a small saucepan over low heat. Add the garlic powder, sea salt, red chili flakes, and fresh cilantro, stirring gently until well combined and fragrant. Keep the heat low to prevent the herbs from burning; the butter should be warm and infused but not browning. Set aside and keep warm until the bread comes out of the oven.
Remove the Christmas tree garlic bread from the oven and let it cool for 2-3 minutes on the baking sheet. Transfer to a serving platter and generously brush the entire tree with the garlic herb butter from Step 5, making sure to coat all the dough balls evenly. Serve warm while the bread is still soft and the cheese and butter are melted.