PUL (polyurethane laminate) or TPU (thermoplastic polyurethane) is the waterproofing found in many types of cloth diapers and covers. It is essentially a waterproof plastic layer than has been fused onto regular fabric. PUL and TPU can separate from fabric in a process called "delamination". This separation can occur for a variety of reasons such as product defects, drying the diapers on high heat, frequently drying diapers in intense/hot sun, or using harsh laundry additives.
If the PUL or TPU layer begins to separate, can you still use the diaper?
The answer is: yes! Although you should use a little more care in handling the diaper (to avoid risks of tearing the plastic layer); the diaper will still function properly. If the plastic layer becomes torn, it may create areas where moisture can leak out of the diaper and the diaper cover should be replaced. However, a separated PUL or TPU layer is certainly no reason to toss out a perfectly functional diaper. In fact, some companies sell usable diapers that have manufacturing problems with lamination for deep discounts (these diapers are often referred to as "seconds").
If you notice your PUL or TPU is separating, first find out if the diaper is still covered under the manufacturer's warranty. Some companies offer no warranties on waterproofing, others offer 1 year warranties, and others offer lifetime warranties.