From the Super Mario Wiki
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A Blue Apple is an item in Super Paper Mario. Found on a tree in Overthere Stair, it restores five HP and cures poison. If the player tries feeding Peach this apple, she shrinks to about the size of Mario shrunk by Dottie. A few seconds later the effect wears off and Peach grows. This may be a reference to Mini Mushrooms, which are also blue, just as how the Red Apple that makes Peach grow is red like a Super Mushroom.