Prep the pan and oven: Heat the oven to 350°F (175°C).
Line a 9x5-inch loaf pan with parchment and lightly grease it so the bread releases cleanly.
Toss the apples: In a bowl, combine the diced apples with 1/2 cup granulated sugar and 1 teaspoon cinnamon. Add a squeeze of lemon juice if you like. Set aside while you make the batter.
Mix the dry ingredients: Whisk flour, baking powder, salt, and a pinch of nutmeg (optional) in a medium bowl.
Cream the butter and sugar: In a large bowl, beat softened butter with the remaining 1/2 cup granulated sugar until light and fluffy, 2–3 minutes.
Add eggs and vanilla: Beat in the eggs one at a time, scraping the bowl.
Mix in 1 teaspoon vanilla.
Finish the batter: Add the dry ingredients in two additions, alternating with the milk and sour cream. Mix just until combined. The batter will be thick but spreadable.
Make the cinnamon swirl: In a small bowl, stir brown sugar with the remaining 1 teaspoon cinnamon and a pinch of salt.
Layer it up: Spread half the batter into the pan.
Top with half the apples (and their juices). Sprinkle on half the cinnamon-sugar mix. Repeat with remaining batter, apples, and cinnamon sugar.
Gently swirl a butter knife through the loaf 2–3 times for ribbons, but don’t overmix.
Bake: Bake 55–65 minutes, until a toothpick in the center comes out clean or with a few moist crumbs. If the top browns too fast, tent loosely with foil for the last 15 minutes.
Cool: Let the bread cool in the pan 15 minutes, then lift it out to a rack to cool at least another 45 minutes. This helps it set so slices hold together.
Glaze: Whisk powdered sugar with 1 teaspoon vanilla and 1–2 tablespoons milk until smooth and pourable.
Drizzle over the cooled loaf. For a thicker coating, let it set and drizzle again.