Just an update:
I did a build/clean all projects, then built the project of APP0.
Now I am getting
Build error: cy_crypto_config.h: No such file or directory
in the file main_cm0p.c, I see this code.
#if CY_BOOTLOAD_OPT_CRYPTO_HW != 0
I was able to compile the CE222802 when I reverted my PDL from version 3.1.0 to 3.0.3.
The CE222802 PDF document clearly states the required version of PDL to be 3.0.3, but I wrongly assumed that having PDL3.1.0 would be backward compatible.
What I noticed is that the bootload_user.h/c files became dfu_user.h/c files and compilation errors occurred.
Sorry for the noise.