According to the rumors, apparently Samsung was testing out a prototype of the Galaxy S8 with the S Pen built into it, just like the Note series. However they later decided against the idea, but it seems that instead of scrapping their plans completely, apparently they have decided that the S Pen will be offered as an additional accessory for the Galaxy S8 that customers can buy if they choose to.
We’re not sure if this just means that the S Pen will work with the Galaxy S8 or if the S8 will have Note-like features that can take advantage of the S Pen’s features. However given the recent rumors that have hinted that the Galaxy S8 could sport a 6-inch display, giving the phone S Pen support with such a big display makes sense.
In any case take it with a grain of salt for now, but making the screen bigger and giving it an S Pen accessory certainly sounds like Samsung is eating into what made the Note series unique from the Galaxy S lineup, and exactly what this means for the future of the Note handsets is unclear.