German cuts shaved area beside knot of hair (7)
I believe the answer is:
chignon
'knot of hair' is the definition.
'chignon' can be an answer for 'hair' (chignon is a kind of hair). I'm not sure about the 'knot of' bit.
'german cuts shaved area beside' is the wordplay.
'german' becomes 'g' (abbreviation).
'cuts' is an insertion indicator (some letters cut their way into a word).
'shaved area' becomes 'chin' (I can't explain this - if you can you should give a lot more credence to this answer).
'beside' becomes 'on'.
'g' going within 'chin' is 'chign'.
'chign'+'on'='CHIGNON'
Can you help me to learn more?
(Other definitions for chignon that I've seen before include "Topknot" , "Roll of hair worn at the back of the head" , "Arrangement of coil of hair" , "Coil of hair at the back of the head" , "Hairstyle" .)