throwaway93434's comments

There's a difference between delisting your app from the Shopify App Store and making it private (now called custom). A delisted app still needs to use Shopify's billing system and pay the 20% fee even if you find new customers yourself. If your Shopify app is private (custom) then it doesn't need to use Shopify's billing system but then it can't be installed by more than 1 merchant. So Shopify has basically created a catch 22. If you want your app to be installed by more than 1 merchant even if it's not on the Shopify App Store then you're required to pay them a fee. For reference, Shopify made this change at the end of 2019: https://www.shopify.com/partners/blog/shopify-public-apps

In my experience the "ApplicationCredit" is virtually worthless. You can't apply a credit after a merchant has uninstalled your app since their Shopify API access token has been revoked. And in the vast majority of cases, refund requests happen after a merchant has uninstalled the app.

Why so many refund requests after a merchant has uninstalled your app you ask? Because Shopify inexplicable doesn't prorate app charges when a merchant uninstalls your app in the middle of their 30 day billing period. Even if a merchant uninstalls your app 1 day into their 30 day billing period then Shopify's billing system still charges them for the full 30 days and doesn't automatically refund them back the difference. So we're often inundated with refund requests from merchants. We then have to send an email to Shopify's billing team to have them refund the charge. It's absolutely nuts!