This is the correct method
$(document).bind('DOMNodeInserted', '#composeHeaderTable0', function(event) {
Instead of this
$(document).on('DOMNodeInserted', '#composeHeaderTable0', function(event) {
In addition I am also able to hide/show based on other element values like this.
$(document).bind('DOMNodeInserted', '#composeHeaderTable0', function(event) {
if ($('#data_parent_type0').val() == 'Leads') {
$("#email_template0 option[value='159a06ef-4d58-6eff-a969-52fdff05d328']").hide();
}
});
Thanks to pointers from Ritesh.