Cysteine protease that plays a key role in autophagy by mediating both proteolytic activation and delipidation of ATG8 family proteins (By similarity). The protease activity is required for proteolytic activation of ATG8 family proteins to reveal a C-terminal glycine (By similarity). Exposure of the glycine at the C-terminus is essential for ATG8 proteins conjugation to phosphatidylethanolamine (PE) and insertion to membranes, which is necessary for autophagy (By similarity). In addition to the protease activity, also mediates delipidation of ATG8 family proteins. Catalyzes delipidation of PE-conjugated forms of ATG8 proteins during macroautophagy (By similarity). Also involved in non-canonical autophagy, a parallel pathway involving conjugation of ATG8 proteins to single membranes at endolysosomal compartments, by catalyzing delipidation of ATG8 proteins conjugated to phosphatidylserine (PS) (By similarity). [protein]-C-terminal L-amino acid-glycyl-phosphatidylethanolamide + H2O = [protein]-C-terminal L-amino acid-glycine + a 1,2-diacyl-sn-glycero-3-phosphoethanolamine [protein]-C-terminal L-amino acid-glycyl-phosphatidylserine + H2O = [protein]-C-terminal L-amino acid-glycine + a 1,2-diacyl-sn-glycero-3-phospho-L-serine Belongs to the peptidase C54 family.