the logic for the lights is that a light on the MCP illuminates for a ARMED mode (in this case APP) as well as for an engaged mode(eg., HDG) except once engaged in certain modes the light may be extinguished to indicate the mode cannot be deselected.
hope this helps....
Of course it helps, thank you.
But your above stated logic does not hold true in the example of HDG and LNAV, according to the replies I received above.