In a medium saucepan, combine the peeled and diced Granny Smith apples, 1/3 cup granulated sugar, 1/2 teaspoon ground cinnamon, 2 tablespoons cornstarch, and 2 teaspoons water. Heat the mixture over medium heat for 5-6 minutes until the apples have softened and the liquid has thickened. Remove the saucepan from the heat and let the apple mixture cool while you prepare the other components.
In a small bowl, mix together 1/2 cup packed dark brown sugar and 1/2 teaspoon ground cinnamon. Set the mixture aside for later use in assembling the cake.
Preheat your oven to 350°F (175°C) and coat a 9×13-inch pan with nonstick spray. In the bowl of a stand mixer fitted with a paddle attachment, beat together 1/3 cup unsalted butter and 3/4 cup granulated sugar for about 3 minutes until light and fluffy. Add the 1/2 cup unsweetened applesauce, 1 teaspoon vanilla extract, and 2 large eggs. Mix on medium speed until well combined, scraping the sides of the bowl as needed.
In a separate bowl, whisk together 2 1/4 cups all-purpose flour, 1 teaspoon baking powder, 1 teaspoon baking soda, 1/2 teaspoon kosher salt, and 1 teaspoon ground cinnamon. Gradually add the dry ingredients and 1 cup Greek yogurt (or sour cream) to the wet batter in alternating additions, beginning and ending with the dry mixture. Mix until just combined; be careful not to overmix for a tender cake. I always like to finish combining the batter by hand with a spatula to avoid overworking it.
Spread half of the cake batter evenly into the bottom of your prepared pan. Spoon the cooled apple mixture from Step 1 over the batter, carefully spreading it to cover the entire layer. Sprinkle two-thirds of the brown sugar-cinnamon mix from Step 2 over the apples. Cover with the remaining cake batter, spreading softly to create an even layer. Finally, sprinkle the rest of the brown sugar-cinnamon mixture evenly over the top.
Bake the assembled cake in the preheated oven for 35-40 minutes, or until the center is set and a toothpick inserted into the middle comes out clean. Allow the cake to remain in the pan for the next steps. I like to gently tent the cake with foil during the last 10 minutes if it looks like it’s browning too quickly.
While the cake is finishing its bake, combine 2 cups powdered sugar, 1/3 cup milk, and 1 teaspoon vanilla extract in a medium bowl. Whisk until completely smooth. When the cake is done and still warm, use a butter knife to poke about 30 holes all over the surface. Immediately pour the glaze evenly over the cake, spreading it with a spatula to cover. Let the glaze set up for around 20 minutes before serving. For extra flavor, I sometimes swap half the milk for apple cider in the glaze.