Breakdown of Það er verið að skipta um gólfefnið í eldhúsinu.
vera
to be
það
it / there (existential) / the one (n)
að
to (infinitive marker)
í
in / into / to (before the hour, in telling time) / per (in frequency expressions)
Questions & Answers about Það er verið að skipta um gólfefnið í eldhúsinu.
How does the Það er verið að structure work here, and why isn't gólfefnið the subject?
This is the impersonal continuous passive. Unlike English where "the flooring" becomes the subject ("The flooring is being replaced"), Icelandic uses the dummy subject Það. The literal structure is "It is being to change about the flooring". When a verb is part of a prepositional phrase (like skipta um), the object stays right after the preposition and doesn't move to the front of the sentence.
What case is gólfefnið in, and why?
It is in the accusative case. Even though this is a passive sentence, gólfefnið acts as the object of the preposition um. The phrasal verb skipta um always governs the accusative. Because gólfefni is a neuter noun, its nominative and accusative forms look identical, but grammatically it is accusative here.
Why do we need the preposition um? Couldn't we just say skipta gólfefnið?
No, because the verb skipta on its own usually means "to divide" or "to exchange" (and it takes the dative case). When you want to say "to change" or "to replace" a physical thing like flooring, clothes, or tires, you must use the phrasal verb skipta um, which requires the accusative.
Could we drop the dummy subject Það if we changed the word order?