Is it true that Sephardim used to eat candied apples with sugar on Rosh Hashaná, and not apples with honey?

Yes, it’s true, as you say. Unlike the custom of our Ashkenazi brothers, the custom of Sephardim regarding the symbols of Rosh Hashanah was to eat cooked apples with sugar, not with honey, because this aligns with the secret, as honey alludes to the measure of judgment (midat ha din). On Rosh Hashanah, we need divine mercy and do not wish to provoke the measure of judgment.

When they came to the Land of Israel after the establishment of the State (and also before, in Western countries, due to the influence of Chabad emissaries), many Sephardim learned from the Ashkenazi custom of eating apples with honey on Rosh Hashaná, to the point that the ancient custom of refraining from honey during these fearsome days was almost forgotten. However, it is important to know that our custom in most Eastern countries (especially in Iraq, Turkey, Aram Tzova, Libya, among others) was, as mentioned, to eat cooked apples with sugar, and this is the more correct practice.

Nevertheless, those who need to use honey, such as someone who is invited to a Rosh Hashanah meal where apples with honey are served, should not be overly concerned about it, as there is a basis for it, even according to the books of the Kabbalists.