I was stripping wallpaper by peeling off the top vinyl layer and then soaking the paper backing to reactivate the paste so the paper could be removed from the wall – and ran into this.
It looks like the previous installer smoothed the wall (which is good), but used a latex spackling compound instead of the more typical joint compound. The latex became wet from the water I was using to soak off the wallpaper, and began to pull away from the wall.
This is all bad, because it leaves a bumpy mess on the wall that will show through the new paper. But worse is that it is an unstable surface for the new paper to try to hold on to. When wallpaper paste dries, the paper shrinks and puts tension on the surface below, particularly the seams. If the surface is not solid, the layers can actually come apart (delaminate) resulting in curled or gapping seams.
This is not “loose paper,” and cannot simply be glued back down. The different layers inside the wall are actually coming apart, and will require a lot of work to make the wall sound again.
Once the paper was off and the wall was good and dry, the layers seemed to adhere to each other better, and the wall felt more solid. The way I treated it was to roll on a coat of Gardz, which is a penetrating sealer that binds things together. It did a good job. Then I skim-floated over that with joint compound, which, when sanded, would leave a nice, smooth surface.
One more coat of Gardz on top of that, and the wall was sound and ready for wallpaper.