This question evaluates understanding of binary tree algorithms, recursion versus iterative traversal strategies, and competence in algorithmic analysis including time and space complexity and handling deep-recursion stack overflow when computing a tree's diameter.
Given a (potentially large) binary tree, compute its diameter (the number of edges on the longest path between any two nodes). Implement an O(n) solution, explain your recursion or iterative strategy, and justify correctness. Discuss how you would handle very deep trees to avoid stack overflow, and analyze time and space complexity.