The first shloka introduced the cosmic tree. Now Krishna fills in the details. Its branches spread everywhere — upward to the celestial realms, downward to the animal and insect kingdoms. The three gunas (sattva, rajas, tamas) feed and expand these branches.
The buds on these branches are the sense objects — what we see, hear, touch, taste, and desire. From a seed comes a tree, from a tree comes another seed. In the same way, from karma comes birth, and from birth comes more karma. This is the cycle.
Secondary roots also spread downward into the human world. This is because human beings are uniquely capable of performing deliberate karma. Among all living beings, only humans choose their actions freely. That is why the roots of karmic bondage are said to be anchored in the human realm.