"Applied Flying" I imagine is all flying that cannot be considered "General". For instance, training for the "Dams Raid" (617 Squadron, May 1943), could probably be classified as "applied", it involved much flying that in no way could be called "general"; it was very specific and demanding, and would only have been used on this operation. So, any type of flying that could not be called "general" might be considered worthy of practice by pilots (and possibly other crew members) before being used operationally. Other types of "applied flying" may have included glider towing, air to air refueling, dropping of parachutists, drogue towing, and certain kinds of experimental flying, perhaps including experiments in application of anti-icing pastes, or introduction of radar aerials with tests to demonstrate that the aircraft were still safe to fly. Apart from these few vague ideas, I know nothing!
Another thought. All the usual tactics and procedures used by operational aircraft (including transports) on their normal operational duties could also arguably be considered "applied flying", as opposed to just flitting about on some general flying practice, or aerobatics, or exploring the general area after being posted to a new locality. Even a night-flying test had a specific purpose, and strict procedures to follow. In fact, this (paragraph) is more likely to be the "true" meaning of "applied" flying.