Acts as an acyl-protein thioesterase that hydrolyzes fatty acids from acylated residues in proteins. Regulates the mitochondrial S-depalmitoylation of the nucleophilic active site residue of peroxiredoxin-5/PRDX5, a key antioxidant protein, therefore modulating mitochondrial antioxidant ability. Also catalyzes the deglucuronidation of mycophenolic acid acyl-glucuronide, an active metabolite of the immunosuppressant drug mycophenolate. H2O + S-hexadecanoyl-L-cysteinyl-[protein] = H(+) + hexadecanoate + L-cysteinyl-[protein] H2O + mycophenolic acid O-acyl-beta-D-glucuronide = D-glucuronate + H(+) + mycophenolate Inhibited by palmostatin-B. Belongs to the AB hydrolase superfamily.