According to a report from a Rockstar Insider Tez2 via the GTA Forums, Bully 2 was under development at some point before work on it was canceled in 2017.
Due to Rockstar need to focus on ending the development of Red Dead Redemption 2, as well as accelerating the development of the upcoming Grand Theft Auto 6. The same news was also confirmed by Yan2295 via Reddit.
Fans have been clamoring for Bully 2 for many years, and there have been a lot of rumors and expectations about it but none of them have ever been confirmed. But this news can be frustrating for fans. This is not the first time that we hear reports that Bully 2 was under development before its complete cancellation. A report released last year that the game was under development for more than a year in 2010 before its abolition.