That plant does not set an acorn so what you are seeing must be some sort of either bloom bud or seed structure. To be sure try taking some to your County Extension Office for them to look over and if need be send to A&M for identification.
The fact that the tree is stunted is rather normal for one that has not been in the ground very long. But you may be needing to keep the soil moist a little more. Not soggy just moist. Dry spells really set them back especially for a young tree that has not had many years to develop an extensive root system. Mulch the area around the tree well to hold moisture and deter weeds. Your fertilizing is fine.
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