In fact, this is the first time I have heard of Erc404. I do not follow developments on the Ethereum network much and do not care about the tokens on it due to the high fees, so I have not heard of this development.
Anyway, according to what I understood from the article:
The experimental ERC-404 token standard combines elements of fungible and non-fungible tokens into a single "semi-fungible" digital asset.
The primary function of ERC-404 appears to be to enable fractional transfers of NFTs, i.e. make them divisible.
Honestly, I don't know what's the point of that? If the main advantage of an NFT is that it is unique and non-fungible, what is the point of retailing it? I think it would lose its unique value in such a case.