I am not sure, this is an educated guess until someone fluent comments: I think "puhi 'o K i ka palaoa" means "K bakes THE bread".
but "puhi palaoa" is perhaps referring to a more generalized action, like that it is K's job and/or everytime K bakes a non-particular bread. In this case the bread goes right after the verb.
That Puhi palaoa is a stumper. If this were a class inclusion pattern, "Kaʻiulani is a bread baker," I think it would be He puhi palaoa ʻo Kaʻiulani. Or instead, if it were an equational pattern, ʻO Kaʻiulani ke puhi palaoa, would be "Kaʻiulani is the bread baker." Itʻs not those two. What sentence pattern is Puhi palaoa ʻo Kaʻiulani? Iʻm so confused. Here, palaoa clarifies what kind of baking K. does, like an adverb.
And, for Kaʻiulani bakes bread from English to Hawaiian, DL accepted Puhi ʻo Kaʻiulani i ka palaoa as well as Puhi palaoa ʻo Kaʻiulani. Is the point of these two sentences to demonstrate two different ways/patterns to express the same idea? Ideas, anyone?
i have a more recent educated guess, but i can't be sure either. It seems that "puhi palaoa" is here a compound VERB. It can mean "bread-baking". So the literal translation is "ka'iulani bread-bakes" therefore "he bakes bread". I am not sure if we have met such compound verbs before, or even if Hawaiian has such verbs, but for now it seems the most satisfying explanation.
Until some fluent speaker verifies this.