What determines the agent version the application or host?
When an application is served by two hosts, and only one host gets a new agent version. The application will be injected with two different agent versions?
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The Oneagent is set at the host level. So if Server 1 servers up Application 1 - then Application 1 will get the injected version that is provided by that Host 1 Oneagent.
If you have two servers Host 1,2 that Serve Up Application 1 then it is best practice to have both hosts at the same oneagent version. This is why you are able to update hosts at Host Grouping Levels as well.
Also keep in mind, that Oneagent Versions don't always contain injection changes for applications, so Having a Host at version 1 and another at version 3, might not change the injection for the application.