Preheat oven to 350 degree. Grease a 9-inch square cake pan then line partially with parchment paper (This just makes it easier to remove from the pan but you can skip that step if you’d prefer.)
Add diced apple, coconut sugar, and a 1/4 tsp of cinnamon to a bowl then mix to combine. Set aside.
In a large bowl, whisk together applesauce, egg, oil, honey or maple syrup, milk, and vanilla. Using a spoon or rubber spatual, stir in the remaining 1 1/4 tsp cinnamon and the rest of the dry ingredients. Mix until just combined then stir in the diced apple mixture.
Spread cake batter evenly in your prepared pan and sprinkle on a pinch of extra oats, if you'd like. Bake until golden brown around the edges and a toothpick inserted into the center of the pan comes out clean, 25 to 30 minutes.
Cool completely then cut into 12 squares. Store in an airtight container on the counter for 2 days or in the fridge for 5 days. You can also freeze the cake, tightly wrapped, for a month or two.