SEP is a library version of the Source Extractor program (SExtractor) that is used to identify stars and other objects in an astronomical image and measure information about the brightness, size, shape, etc.
SEP used to be separately implemented in KStars, but since it was combined with astrometry.net in StellarSolver, it made more sense to use the implementation in StellarSolver for it in KStars rather than have duplicated code. It is also better because the options profiles I made for StellarSolver can be used for both star extraction and plate solving. So if you find that a really good set of options works for detecting stars in your image, you can use the same profile for focus, guide, and plate solving.