Cysteine protease that plays a key role in autophagy by mediating both proteolytic activation and delipidation of ATG8 family proteins. The protease activity is required for proteolytic activation of ATG8 family proteins: cleaves the C-terminal amino acid of ATG8 proteins to reveal a C-terminal glycine . 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 . Preferred substrate is GABARAPL2 followed by MAP1LC3A and GABARAP . Protease activity is also required to counteract formation of high-molecular weight conjugates of ATG8 proteins (ATG8ylation): acts as a deubiquitinating-like enzyme that removes ATG8 conjugated to other proteins, such as ATG3. In addition to the protease activity, also mediates delipidation of ATG8 family proteins. Catalyzes delipidation of PE-conjugated forms of ATG8 proteins during macroautophagy. Compared to ATG4B, the major protein for proteolytic activation of ATG8 proteins, shows weaker ability to cleave the C-terminal amino acid of ATG8 proteins, while it displays stronger delipidation activity. Involved in phagophore growth during mitophagy independently of its protease activity and of ATG8 proteins: acts by regulating ATG9A trafficking to mitochondria and promoting phagophore-endoplasmic reticulum contacts during the lipid transfer phase of mitophagy.