While we're on the topic of applause, what do we think of applause in the middle of a song/tune?

I once played a song at an open mic with two verses, a solo, then a third verse. In the middle of my solo there was applause, and I assumed that the audience thought I was winding up and I said, "No, no, there's more!" I was really embarrassed, and wondered if they thought I SHOULD be winding up, and I made a total mess of the rest of the solo.

It was a month later when I suddenly realized that sometimes people clap in the middle of a piece to show extra appreciation, and that that was probably what had happened. So I felt honoured in retrospect, like I had crossed some milestone in my career, and I realized that I should really have my material down well enough that a distraction won't throw me off.

But still... if applause in the middle of a performance is likely to distract the performer and takes away from the continuity of a song, is it worth the extra appreciation?

Marion