Apple Tree questions

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That hole looks like it was made by some other insect, probably some sort of large beetle... looks more like an exit hole, the insect pupated and chewed it's way out. Insect eggs were laid on the surface, upon hatching the "worm" chewed a tiny diameter hole deep into the wood where it created a chamber, now after pupating it made a much larger and messier hole for its escape.
Its awesome to see that inside the wood as the organism grows so does the hole. I have seen that in dissections.
Are you sure its not a old pruning cut?
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