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Lightly grease a 9-inch square or 8×10-inch baking dish. (You may use a similar size baking dish of any shape, although a 9×13-inch is too big).
Scatter the apples evenly over the bottom of the dish, followed by the nuts, optional dried cranberries or raisins, and finally the steel cut oats. Set aside.
In a large bowl, whisk the milk, eggs, shredded apple or applesauce, maple syrup, butter, vanilla, baking powder, cinnamon, optional nutmeg, and salt until fully incorporated. (It’s ok if the butter forms small clumps.)
Pour the milk mixture evenly over the apple/oat mixture. Cover the dish with plastic wrap and refrigerate overnight. (Make ahead tip: Alternatively, you may prep early in the day, refrigerate for at least 8 hours, and then bake. Cool completely, cover, refrigerate, and warm in the morning.)
When ready to bake, place the baking dish on the counter to take the chill off while the oven preheats to 350℉. Uncover the baking dish and bake for 50-55 minutes, or until the mixture is set in the middle. Check a few minutes early and add a few minutes, as needed, based on oven and dimensions of baking dish. The oats will be tender but still slightly chewy. You may slice or scoop the oatmeal into bowls and enjoy as is or with additional milk or a dollop of yogurt.