The fanout option would be used to create multiple gdbs named per the LAYER field. To create feature classes based on the LAYER field: In your writer parameters, set the Feature Class or Table Name parameter to 'LAYER'.

So I do this and I get the error: Geodatabase Writer: Feature Type Definition 'Traffic Separation Scheme Boundary' was requested, but not defined

To me, it is reading in the "feature_type" which in this case is "Traffic Separation Scheme Boundary" and trying to Write based on "LAYER" which has a different value then "Traffic Separation Scheme Boundary". Can I force my reader to read in features based on "LAYER"?

I want to read in everything from the GDB, dynamically I believe, I dont want 600 separate feature class readers coming in, then I want to fanout my current feature classes based on the "LAYER" field. When I attempt this I get that error. This seems extremely easy and I am probably missing one or 2 clicks/settings.

@sjolster31​ FME is trying to create a layer called "Traffic Separation Scheme Boundary" but there is no schema to tell it what to create. You need to link the "Traffic Separation Scheme Boundary" to the source feature - probably using fme_feature_type. The Dynamic Workflows tutorial describes some of this. Probably in the section Destination Schema Contains Different Feature Type