= Solution
Write
$$
C=A_0A_1\cdots A_r.
$$
Under the improved bounds allowed in the question, $r=O(\log^{O(1)}(2K))$ and
$$
|C|\geq\exp\bigl(-O(\log^{O(1)}(2K))\bigr)|A|.
$$
Moreover $AC\subseteq A^{O(1)}$, whose size is at most $K^{O(1)}|A|$ by the <higher product bound for an approximate group>. Thus
$$
|AC|\leq\exp\bigl(O(\log^{O(1)}(2K))\bigr)|C|.
$$
The <Ruzsa covering lemma> supplies $X\subseteq A$ of size at most $\exp(O(\log^{O(1)}(2K)))$ such that
$$
A\subseteq XCC^{-1}
=XA_0A_1\cdots A_rA_r\cdots A_1A_0.
$$
Taking the $B_i$ to be the factors in this last product gives
$$
\boxed{A\subseteq XB_1\cdots B_k,}
$$
where $k\leq O(\log^{O(1)}(2K))$ and every $B_i$ is a $K^{O(1)}$-approximate group in $A^{O(1)}$ generating a subgroup of step less than $s$.
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