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I don't remember the talk that I was watching, but if I remember correctly the speaker mentioned something about separating out the wallet part of Bitcoin Core because not all of its functionality is dependent on Bitcoin Core. This seems like an interesting project to me but I can't find any information about it, so I'm wondering if anyone else knows more about it.

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I think you are referring to Russell Yanofsky's work on process separation (see this StackExchange post) which aims to separate out not only the wallet but the GUI as well from the node.

When completed (it is mostly functional today but some final PRs still need to be merged) it would give the user the option (but not the obligation) to run a multiprocess version of Bitcoin Core with the wallet and the GUI running on separate processes.

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