It might be easier to think about it as a stack, rather than a tree. Each element of the stack represents a subtree -- a perfect binary tree. If you ever have two subtrees of height k, you merge them together into one subtree of height k+1. Your stack might already have another subtree of height k+1; if so, you repeat the process, until there's at most one subtree of each height.
This process is isomorphic to binary addition. Worked example: let's start with a single leaf, i.e. a subtree of height 0. Then we "add" another leaf; since we now have a pair of two equally-sized leaves, we merge them into one subtree of height 1. Then we add a third leaf; now this one doesn't have a sibling to merge with, so we just keep it. Now our "stack" contains two subtrees: one of height 1, and one of height 0.
Now the isomorphism: we start with the binary integer 1, i.e. a single bit at index 0. We add another 1 to it, and the 1s "merge" into a single 1 bit at index 1. Then we add another 1, resulting in two 1 bits at different indices: 11. If we add one more bit, we'll get 100; likewise, if we add another leaf to our BNT, we'll get a single subtree of height 2. Thus, the binary representation of the number of leaves "encodes" the structure of the BNT.
