For Applied Maths / Engineering masters and PhDs transitioning into industry, do they still get to use MATLAB?
MATLAB is absolutely used in industry, and I'm certain that's where the majority of the company's income is from. 

If you like, you can think of the extremely cheap student and university usage as a "first taste is free" policy by a dealer: it is highly advantageous to MathWorks to have large numbers of students graduating with experience and comfort in MATLAB. If it's then part of the standard "tools of the trade," that's something that most companies can afford for anyone who clearly needs it to accomplish their job: if a good engineer costs you $300K/year (when salary, benefit, overhead, etc., are all included), and having them use MATLAB makes them a little more efficient, it's well worth it.

Now, if you're not in a job where that cost-benefit tradeoff is clear to the leadership, then you'll have a hard time getting ahold of MATLAB --- and that's what free and open source alternatives (in this case Octave) are for.