Preheat oven to 350°F. Spray a 9x9-inch cake pan with butter-flavored cooking spray.
In a large bowl, cream margarine and 1/2 cup sugar substitute.
Stir in apple sauce, milk, and egg. Add flour, baking powder, baking soda, and apple pie spice. Mix gently to combine.
Fold in 2 Tablespoons walnuts.Spread batter into prepared cake pan.
Bake for 20 to 25 minutes or until a toothpick inserted in center comes out clean.
Place cake pan on a wire rack and allow to cool completely.
In a medium bowl, stir cream cheese with a spoon until soft. Add remaining 1 Tablespoon of sugar substitute, vanilla extract, and whipped topping. Mix gently to combine.
Spread mixture evenly over cooled cake. Sprinkle remaining 2 Tablespoons walnuts evenly over top. Cut into 8 servings. Refrigerate leftovers.