I finally abused my little strip enough that it split into two layers on the edge and I was able to peel it apart. THEN I could rip those in half on their own. Looks like it's made of 2 or more layers of the stuff, and they layer the fibers so they go perpendicular to each other. Explains why it was so hard to rip!
I was doing more research and apparently the leather patch on Levi's isn't leather anymore, it's something similar to this stuff.
I'd never heard of Oly*Fun but I just looked at the link and it doesn't look the same at all. The KraftTex stuff is a lot more like thick heavy paper, the Oly*Fun looks like that thin, strong, fabricky stuff that tote bags are made out of sometimes. I would expect the Oly*Fun stuff to be pretty soft and flexible? The KraftTex is really stiff right off the bolt, almost like thin cardboard.
I'm glad I posted about this stuff, you are all pointing out other similar stuff that's interesting too. No wonder I'm not getting any quilting done, I'm too busy experimenting with new stuff! LOL