Hydrolyzes fatty acids from S-acylated cysteine residues in proteins. Has depalmitoylating activity towards NRAS. Has depalmitoylating activity towards DLG4/PSD95. May have depalmitoylating activity towars MAP6. H2O + S-hexadecanoyl-L-cysteinyl-[protein] = H(+) + hexadecanoate + L-cysteinyl-[protein] Palmitoylated on cysteine residues located in a cysteine cluster at the N-terminus which promotes membrane localization. Palmitoylation is required for post-synaptic localization and for depalmitoylating activity towards DLG4/PSD95. Belongs to the AB hydrolase superfamily. ABHD17 family.