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We use olive oil for almost everything - except when it calls for sesame oil or something similar. It did take time for the kids to get used to it & I started with some that said on the bottle it was super light "for baking"...but at that time I only had some really cheap olive oil & you really could taste the difference. I think you probably won't taste the OO if your recipe has spices in it, like most recipes I've had.
I'm sorry I don't know the answer to your question about substituting applesauce. I know you can do it - just not the specifics.
If it's a sweet bread, the olive oil taste may interfere, especially if it's extra virgin. If it's a savory bread, go for it! It may add a complexity of flavor.
We use the extra virgin in the big gallon can - even in the shortcake recipe on the side of the Bisquick box. Those are very bland on their own & no one notices it...but as I said, we've been doing this for a long time.
I use this in place of oil for just about everything, including cakes and quickbreads. I just use equal to what ever amount of oil was called for. I've never had a problem yet and my baking always turns out very moist and fat free!
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