If you haven't heavily starched the border, then you will need a stabilizer to sew applique. Just a piece of lightweight paper might be enough.
I would test the Steam a Seam 2 on the muslin fabric by using some scraps to fuse a sample and throwing it in with every wash and dry load for awhile to see how they are. Years ago when I used it, it stayed fine without sewing when I ran a sample through the laundry like this. However, a lot depends on your specific application of it -- for example, your iron may not be as hot as mine was (or hotter) and that can affect the sticking power of the fusible, your fabric may not have been prewashed and it may be that some of the fabric finishing chemicals from the factory affect the holding power of the fusible, etc.
Does the package say you can sew through Steam a Seam 2? If so, you could also create a sample and then sew through the sample to make sure you won't have any problems with your particular combination of fabric, iron temp, age of fusible, etc.