The single pass is not the problem here. The issue is that you can only apply utilities defined with @utility.

If you update your CSS file with that instead, then it will work.

More info: https://tailwindcss.com/docs/upgrade-guide#adding-custom-utilities

In Tailwind CSS v4 (which is CSS-first), @apply only works with utility classes that have been officially registered in Tailwind's utility pipeline.

When you define a custom class using standard CSS layer nesting inside @layer utilities, the oxide compiler does not scan and register it into the utility pipeline for @apply to recognize.

To fix this, you should use the new @utility directive instead of @layer utilities. This registers the class properly:

@utility p-16-regular {
  @apply font-normal text-[16px] leading-[140%];
}

@utility wrapper {
  @apply max-w-5xl mx-auto px-5 md:px-10 w-full text-dark-400 p-16-regular;
}

This ensures the Tailwind compiler registers .p-16-regular as an active utility, allowing it to be correctly referenced by @apply inside @utility wrapper.