According to the team this isn’t a supported use case with the Terminal API. Collecting fees from yourself isn’t recommended. While you’re doing today with payments with the API we recommend moving away from that model and using OAuth to connect to each Square account to collect fees. 
I believe you are missing the use case.
The app_fee parameter in the terminal API should work the same way as the app_fee parameter does in the payment api (credit cards and ACH).
It should not matter if the bank accounts are the same or not. This has been in existence from the beginning of the introduction of an app fee.
We have a few different use cases and the App_Fee does not work in either case.
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(Typical) Locations have a bank account and app fee goes to our company bank account (2 different bank accounts).
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Location uses our corporate bank account and we collect money on their behalf and send a check on a scheduled basis. Charge and app_fee go to the same bank account but get categorized as different types of payment.
Joe Romanowski
Technical Sales | Support
C: 617.699.4171
[email protected]
lynxlog.com Formerly: MooringInfo
We understand the use case however this is likely to change in the future.
This isn’t the intended use case for app_fee_money. You are correct that payments from the Payments API will allow you to collect a fee from yourself. As previously mentioned this is likely to change in the future for compliance reasons. We recommend switching to the intended use of app_fee_money with OAuth to avoid any disruption of business in the future.
Please note that Terminal API will not support collecting app_fee_money from the same Square account the application is associated to. Nor are there any plans to support this in the future due to compliance reasons.