The "application mode" means you just install Headwind MDM on the device as a regular APK. This will work on any Android version starting from Android 4.
To run Headwind MDM in "MDM mode" (or device owner mode), you need to use the enrollment process. This feature is available on Android 7 and above.
The main difference is that in "application mode" the user must confirm every app update or install, there's no "silent" installation. Also, some features like remote reboot and factory reset are not working.