The project is called “Lacros” which Google says stands for “Linux And ChRome OS.” This will split ChromeOS’s Linux OS from the Chrome browser, allowing Google to update each one independently.
Previously ChromeOS was using a homemade graphics stack called “Freon,” but now with Wayland, it’ll be on the new and normal desktop Linux graphic stack. Google’s 2016 move to Freon was at a time when it could have moved from X11 (the old, normal desktop Linux graphics stock) directly to Wayland, but it decided to take this custom detour instead. Google says this represents “more Wayland support” because Wayland was previously used for Android and Linux apps, but now it’ll be used for the native Chrome OS graphics, too.
It’s not cancelled but was impacted by layoffs recently.
It’s a Unix-compatible (i think?) kernel with a Flutter frontend for IoT and embedded devices. If you’ve ever used a Google Nest device it’s probably running Fuschia.