Would a lake lot with an old 2 bdrm - 1 bath cabin be covered by RESPA if the applicant intends to raze the existing structure and build a new home?

I say yes - twice. A structure is a structure. Something unexpected may happen and the cabin turns into a rental, RESPA applied. If the applicant builds within 2 yrs - yes again.

Lender wants to argue. Looking for 2nd or alternate opinion(s).

You are right -- and your lender owes you lunch. Both flood and RESPA look at what is there when the loan is made. What the borrower plans to do with it does not determine coverage.

Respa would apply if he intends to build, due to title transfer...however why would Respa apply if for rental purpose purchase? Altho that is unknown and a general "what if" assumption is apparently being made.

Sounds like the purpose is to purchase and then construct. If that is the purpose then yes, I would follow requirements depending on whether or not you are commiting to the end financing.