Whisk together flour(s), baking powder, baking soda, nutmeg and salt. Set aside.
Add butter, applesauce and both sugars to a medium bowl. With a hand or stand mixer, beat on medium to medium-high until light and fluffy, about two to three minutes. Scrape sides along the way. Turn the mixer to low; add eggs and extract, then mix until just incorporated.
Add milk and zucchini, then spatula stir until combined. By hand, add flour in 3-4 increments, incorporating after each. Fold nuts, if using (careful to over mix). Sweep the bottom of the bowl, making sure flour isn't hiding.
The batter will be thick. Spatula into the prepared pan, then even with an offset spatula and sprinkle with sugar/spice/additional nuts. On a folded dishtowel, tap the loaf pan down a couple times to distribute the batter further.
Bake on the center rack for 50-60 minutes.Because ovens vary, begin checking around 45 minutes. Bake until the bread is set and a center inserted toothpick comes out clean or with few crumbs. It's better for the bread to be underdone and able to continue baking on the counter, then overdone.
Remove pan from the oven and let stand on the cooktop for 10 minutes, then remove (with parchment attached), transferring to a wire rack.
Warm or cool, this bread. <--- That's a period ; )
I haven't tried with all-purpose flour but it can be used.
Our zucchini was super wet, so I squeezed two worth about 70% and left the third zucchini fairly wet. Zucchini dries with age, so if there isn't much moisture, there's no need to wring.
For crunchy on the out and soft on the in, leave bread on a rack loose tented with foil. For soft inside and out, store airtight.
If nutmeg isn't a favorite—cinnamon, clove, or no spice at all is good too.