The thing that bugs me most about Applejack apparently having the element of Honesty is that she -blatantly- lied to Rarity in Boast Busters. Rarity is freaking out about her hair and both Twilight and Rainbow Dash lie outright. Twilight says "Nnnothing." then Dash says "It's fine!" followed by Applejack, the element of Honesty saying "It's gorgeous." Not only is that outright lying, but it's flat out wrong and needless to do so. They could have easily had Fluttershy say it's gorgeous instead, with Applejack giving the honest "It's green." line, instead of Spike, but they didn't.
Heh, that's true. I guess they were trying to give Spike more of a focus in that scene and play him up as the one who's most actively pushing the "we gotta do something about Trixie" line, but it doesn't seem like it'd have hurt anything to have Applejack be the "honest" one there.
Still, I'm trying to picture that scene now with AJ saying "It's green!" ... and you know, having AJ be a character with an "always tells the truth" schtick actually feels really weird and uncomfortable somehow. I know it's just that we know her character really well by now and anything that departs from it will seem "wrong", but it seems to me that they've carefully made her into someone who's matter-of-fact and businesslike and a little bit harsh, but not under any kind of compulsion to Always Tell the Truth even in situations where it's not quite called for. It's like, it would almost go against the rest of her highly self-aware, well-socialized persona for her not to have control over that impulse or to not be able to even force herself to lie when it's the "appropriate" thing to do.
Going back to that Boast Busters scene, she's the one who yanks on Rainbow's chain when she's being classically tactless. (I love that scene so much; it was one of the earliest "I'm gonna fucking obsess over this show, aren't I?" moments.)
"Showin' off ain't cool, y'all."
"Yeah! 'Cause I'm the best anyway!"
"Uh... yeah! Magic sucks!"
*glare more, because hey remember some of your friends do magic and stuff*
*stare with enormous eyes, like "What? What?
You know what I mean? It's like her "honesty" as conceived is really more of a moral-support/social coaching kind of thing than a "never tell lies" kind of thing. It's more that she'll tell you what you need
to hear even when others are afraid to, whether it's to encourage you or
to correct you—and even if it's not strictly true, as long as it gets you motivated or solves an immediate problem. It's more about honesty in spirit—maybe "openness" or "earnestness" would be a better word—than a simple inability to lie. (The latter feels more like a gimmicky quirk than a useful element of friendship in any case, doesn't it? It'd be like if they'd made Pinkie the Element of Telling the Future.)
E: So to follow-up itinerant nomad's point, I wonder if a story that really exercises Applejack's character wouldn't best be about some situation where someone's counting on her to keep her head on straight somehow, by being sure to tell her if she's getting too obsessed or whatever, but AJ finds she can't bring herself to do it because it means too much to whoever-it-is to be able to succeed. For the sake of argument, make it RD pushing herself to train for the Wonderbolts, and she's counting on AJ to tell her if her routine is up to snuff; and she works for weeks on some particular stunt, and it's up to AJ to tell her it's just not cutting the mustard, but RD is so obsessed with it AJ can't force herself to tell RD to cut it in favor of something else. That would be a failure of the kind of "honesty" that AJ really embodies, to me.
E: VV Oh sure, not saying "they should do this episode"; just putting together a straw-man situation to illustrate what I'm talking about. Hell, make it about Twilight working on her thesis. Can't you just hear her going, "Applejack! You were supposed to be honest
with me! How could you let me spend so much time chasing this dead-end theory?"