Part of the bacABCDEFG operon responsible for the biosynthesis of bacilysin, an irreversible inactivator of the glutaminase domain of glucosamine synthetase. Catalyzes the dehydrogenation of the C7-hydroxyl group in the 4S-tetrahydrotyrosine (4S-H4Tyr) to yield anticapsin (epoxycyclohexanonyl-Ala). It is not able to oxidize the 4R-H4Tyr diastereomer and the dihydrobacilysin dipeptide (L-Ala-4S-H4Tyr dipeptide)