Cysteine protease that plays a key role in autophagy by mediating both proteolytic activation and delipidation of ATG8 family proteins (PubMed:12473658, PubMed:15169837, PubMed:17347651, PubMed:21177865, PubMed:21245471, PubMed:22302004, PubMed:32732290). 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 (PubMed:12473658, PubMed:15169837, PubMed:17347651, PubMed:21177865, PubMed:21245471, PubMed:22302004). 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 (PubMed:12473658, PubMed:15169837, PubMed:17347651, PubMed:21177865, PubMed:21245471, PubMed:22302004). Preferred substrate is GABARAPL2 followed by MAP1LC3A and GABARAP (PubMed:12473658, PubMed:15169837, PubMed:17347651, PubMed:21177865, PubMed:21245471, PubMed:22302004). 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 (PubMed:31315929, PubMed:33773106). In addition to the protease activity, also mediates delipidation of ATG8 family proteins (PubMed:29458288, PubMed:33909989). Catalyzes delipidation of PE-conjugated forms of ATG8 proteins during macroautophagy (PubMed:29458288, PubMed:33909989). 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 (PubMed:29458288). 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 (PubMed:33773106).