Azure AD OAuth2 Limits | Microsoft Community Hub

It’s not some 3rd party “SaaS” app.  It actually doesn’t exist yet, and I don’t fully understand Microsoft’s terminology here.  I’m not 100% sure what the role of the app proxy is.  If for example, we develop a web application and make it accessible on the internet (but only to authorized individuals, i.e through azure AD credentials), is this “proxy” component even needed?

The names obviously mean something because the licensing details include them, I just don’t know the difference between “SaaS” applications from a 3rd party, and some home-grown application.  Are all “served” applications that come over the internet considered SaaS now?