I have that tree design in the smallest size, and I can confirm that the size refers to the overall tree with one set of leaves in place, as in the top part of the picture. The individual leaves below are also supplied with the pattern, to be added separately.
I haven't actually stitched it myself, but you would have to rehoop the fabric so that the sewing area was where you wanted the next leaf to be, and then tweak it when in place (my machine lets you move up and down and rotate the design).
Urban Threads has a tutorial for using their
split designs that shows you how to do it using templates.
I believe that some split designs - where the positioning of the next part has to be precise - have a temporary finishing stitch for the first part and starting stitch for the second part which you line up, and remove when you've finished. I may be wrong about this though, because I don't think I've used one like that!