Stumpokapow
listen to the mad man
I'll bet "recoupable application fee" is probably something along the lines of minimum units sold thresholds/projections that need to be hit, and then they're given their fee back. No withholding of sales revenue, just the fee money itself.
Probably on a case-by-case basis too.
The more logical way to do it would be Valve waiving its 30% cut against the fee. So if the fee is $250 then you'd be paid back 100% at $800 of revenue (in addition to the $550 of money you made on your own from those sales). This way even if someone doesn't recoup the fee, they recoup it partially.