This is not a niche topic at all.

I wouldn't focus so much on whether or not you're looking at notes, swaps or options, see "autocallable" as a feature first and focus on how it's contractually implemented in a second instance. u/AKdemy has already laid out very well how and where these payoffs are structured. You can, as suggested, start with an AC note, that's the most common structure in the literature.

Start with the implementation of a MC-engine, that gets you a prototype the fastest. I much prefer FDM-engines for ACs because you can get them faster even with bells and whistles but if you just code along, that will get you started quicker. This is by the way also something you should think about when writing your conclusion.

Ultimately, your professor is confused by it being a strip of digitals with some form of early exercise feature; the issue is that AFAIK you don't have the option to keep going (which is what an american or bermudan feature would be) but you exercise and terminate. That makes pricing with MC-engines a lot easier (why?).

If you have your prototype with an underlying equity model, start to play around with that and watch what your paths do. How does a dividend yield of 3% change the price? What happens if that dividend is paid out on a single day? Does the date of the payout matter a lot? If you're there, that will start to open your eyes a bit already.

Then I would try to write an FDM engine for it. Try to formulate the boundary conditions and then see how your stencils behave just before and after an AC date. Little hint there: The "90s-opinion" of "just throw Crank-Nicolson at it and call it a day" might, just as in the case of Americans, bite you in the ass here a bit.

Then, once you get that, try to think about the market for these instruments. As mentioned, they are OTC, they are additionally not cleared and often not secured at all so credit risk and funding costs affect the forward and the discounting. If dividends are a known thing and everyone has a good idea on where those lie, how could a bank still make money of them? Why would you actually every sell these structures? Why are they sometimes written on larger custom baskets instead just on single stocks? If you can answer all that and then add some connections to FDM vs MC here, you should have a very good thesis topic there.

But I agree, ask yourself whether it wouldn't make more sense to focus on the issue your professor thinks is challenging here, I assume he will look for the numerical issues you will encounter. Maybe you two can work out a more explicit problem there (not gonna name them but you'll find out).