Maybe 'appa' became derogatory word in Malayalam not because of Nair tradition of 'Sambandham', where 'appa' was a ritual father and not a biological father. The reason could be very silly. A dish common in Tulu and Malayalam region is called 'appam', a rice pancake puffed in the middle and the tapering sides, in southern Malayalam region, whereas, 'aapa' in Malabar region (or only in Kasaragod). In my opinion, when southern Malayalis for some weird reason turned 'aapa' into 'appam', children started making fun of 'appa' and 'appa' and father appa went out of favour.
The creation of a taboo on kinship terms can be very quick. It appears grandmothers of Tulu region no longer like to be addressed as 'grandmother' in local lingo. In Tulu, traditionally, it's either 'dodda' or 'ajji'. However, in its place they are making their grandchildren to call them 'ammamma'. The other day, my mother said that her friend admonished her for allowing her grandchild to call her 'ajji'. So, it appears once a new kinship term appears, there would be an active and concerted effort to make the old term obsolete by making it derogatory. In fact, making it derogatory is necessary for suppressing it. If I extrapolate this 'ammamma' in Tulu region to 'appa' in Malayalam region, I would say appa was used widely in Malayalam region once upon a time.
The creation of a taboo on kinship terms can be very quick. It appears grandmothers of Tulu region no longer like to be addressed as 'grandmother' in local lingo. In Tulu, traditionally, it's either 'dodda' or 'ajji'. However, in its place they are making their grandchildren to call them 'ammamma'. The other day, my mother said that her friend admonished her for allowing her grandchild to call her 'ajji'. So, it appears once a new kinship term appears, there would be an active and concerted effort to make the old term obsolete by making it derogatory. In fact, making it derogatory is necessary for suppressing it. If I extrapolate this 'ammamma' in Tulu region to 'appa' in Malayalam region, I would say appa was used widely in Malayalam region once upon a time.