"The Running Applications collection contains the paths of each of the currently running foreground applications, sorted by use." – collection:Running Applications [Keyboard Maestro Wiki]
The %Application%All% token is said to be for "All of the applications, one per line, from front to back" (token:Application Tokens [Keyboard Maestro Wiki]) and that includes background applications.
I made the issue of foreground/background applications explicit in a suggestion I made for a revised version of that page: Suggested edit for "Application Related Tokens" page