If you believe the latest rumors regarding Rockstar Games, it sounds like Bully 2 may have been scrapped by the team. The rumor started on the GTA Forums, where one of the more credible leakers of information by the name of Tez2 says that the game was essentially scrapped by the company as the team was put on the next Grand Theft Auto title. Here's a quote from the response he gave about the game's development in the forum that has everyone questioning the future of the game.
My guess is it was still in pre-production back in 2015, so development probably didn't kick off until 2016 or 2017, but shortly after that, the pace slowed down due to RDR2 increased focus and Bully 2. The latter was canned in 2017, so I presume they did that to focus on GTAVI.
As much as that actually sounds reasonable, it's hard to believe that for all this time that people have been waiting to see a sequel, that it's essentially been canceled with no recourse of ever going back into development. It's not like it's unheard of for a game to go away after failing to meet the standards of the team or just not working or getting in the way of other projects that needed more attention. But knowing how much of a fanbase there is for Bully 2, we'd be shocked if Rockstar Games actually tossed this one in the dumpster just to make sure Grand Theft Auto VI was perfect. It's probably sitting on a proverbial shelf somewhere in developmental hell waiting for everyone to be done with the next game so they can get back on it. Here's hoping they finish off the game sooner than later and get back to making this one.