When a lead has been moved to your closed lost Funnel pipeline stage, it won't automatically move backwards through the stages if they reapply.
If you wish, you can set an automation to bring a "lost" lead backwards into the pipeline stages when they complete a form.
The trigger is: Contact completed a form - Pick the relevant form (e.g. Application Form).
Then, a branch is needed to check if the lead is currently in your Closed Lost pipeline stage. The branch custom condition is: Pipeline stages - Closed lost (this may have a different name in your Funnel) - Contact is currently in stage - True.
The automation action card is to set lead details - Stage - Application received (or choose relevant stage).
By using this automation, when an application form is submitted and a particular lead has been in the closed or lost stage in the past, you can now change its intended stage.
If that form is submitted for a lead that has never been in the closed or lost stage, then the automation will end without any further action.