Knowledge having a bearing on human life was placed highest
Knowledge about human life was placed highest
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So, in your sentence, bearing uses the third definition that is given, which I rewrite as "to have a relationship or a relevance with." That is, your sentence might be rephrased as the following: "Knowledge that has to do with, or has a connection with, human life was placed highest."
The meaning of bearing on is "relation or relevance" (bearing is a noun).
The difference between the two sentences is that in the first the knowledge is related to human life, while in the second the knowledge topic is human life.
Bearing on is usually used in sentences such as "the case has no direct bearing on the issues."
If I should choose between the two sentences, I would choose the second one. Alternatively, I would rephrase the sentence, but I don't see any reason to not use about.