Back in the 80s, when 90% of software development consisted of using a database and the tooling provided by the database supplier, and creating a front end to enter/edit/view the database contents, the results were called "applications".

In the 2020s, when 90% of software development consists of using a database, tooling supplied by various open source projects and some choice of web front- and backends to create a front end to enter/edit/view the database contents, the results are called "apps".

plus ça change, plus c'est la même chose

For most companies, the real application is the database. Everything else is just a UI to view/edit the database contents.

Close. An app isn't valuable without the extensive business rules.

To be fair, they aren't wrong. Web applications are applications. Who says native mobile applications are the only kind of applications?

Though if you call the PNG file that's a menu for your restaurant an app, that's just wrong.

Can you apply that image file to help you order food? Then that's an application.

And that's why they are wrong. If anything and everything can be called an app then the word lost its meaning.

Apply the image file? Do you apply road signs?

Yes and yes. I'm not a native English speaker, though.

Definitions of the verb apply from https://en.wiktionary.org/wiki/apply#Verb:

2. (transitive) To put to use; to use or employ for a particular purpose, or in a particular case

    to apply funds to the repayment of a debt

3. (transitive) To make use of, declare, or pronounce, as suitable, fitting, or relative

    We need to apply the skills we've learned to solve this problem

I can see their point. Even a static website can be seen as a very (very) simple multi-page app.