Hydrolase that can specifically remove 'Lys-48'-linked conjugated ubiquitin from proteins and plays an important regulatory role at the level of protein turnover by preventing degradation. Regulator of T-cell anergy, a phenomenon that occurs when T-cells are rendered unresponsive to antigen rechallenge and no longer respond to their cognate antigen. Acts via its interaction with RNF128/GRAIL, a crucial inductor of CD4 T-cell anergy. Isoform 1 destabilizes RNF128, leading to prevent anergy. In contrast, isoform 2 stabilizes RNF128 and promotes anergy. Surprisingly, it regulates RNF128-mediated ubiquitination, but does not deubiquitinate polyubiquitinated RNF128. Deubiquitinates estrogen receptor alpha (ESR1). Mediates deubiquitination of 'Lys-48'-linked polyubiquitin chains, but not 'Lys-63'-linked polyubiquitin chains. Not able to cleave di-ubiquitin. Also capable of removing NEDD8 from NEDD8 conjugates, but with a much lower preference compared to 'Lys-48'-linked ubiquitin.