An increase in applications does not necessarily mean a more competitive cycle. People could just be applying more broadly this cycle. Most people do not apply to law school on a whim because the LSAT and application costs are a barrier. However, if there was fear that this cycle was going to be competitive (and I think there was) it would make sense for people to apply to more schools than they had initially planned to increase their chance of getting a offer.
Alternatively, if COVID scared people away from the labour market, and there were more impromptu law school applications this year, applications may be up significantly more than number of applicants. If I was applying to law school without having written the LSAT, I would apply to schools broadly in case I got a bad LSAT score. I have no idea if there is actually data to support that people who submit law schools applications without having written the LSAT apply to more schools than people who submit law school applications who already have an LSAT score though.