Ive posted some screenshots. I'm using Unity 2019.4.1f1 and AC 1.71.5 though I have added a 2d collider on the base of the tree and added it as a hole in the inspector, the character still appears below and not moving around the front outside of the tree collider.
https://www.dropbox.com/s/4ob3xkgqy55zbay/ACTreeIssue.jpg?dl=0
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The character's position looks fine - just the sprite layered underneath it.
The sprite ordering isn't related to NavMesh - you instead need to define a Sorting Map in the scene to determine what character sprite "Order In Layer" values should be set to according to their y-position.
See the Manual's "Adding a Sorting Map" chatper, or this part of the 2D tutorial for a video guide: