Rockstar canceled Bully 2 back in 2009

Game Informer's report

is arguably the most extensive written account that contains details about Bully 2.

The main takeaway here is that Rockstar worked on Bully 2 for nearly two years before Rockstar management prioritized other "more important" projects. What's interesting here is that Rockstar dropped the development when some 70 people were working on Bully 2 at some point. This suggests that the studio wasn't afraid to devote resources to the project. Unfortunately, Rockstar's infamous crunch culture forced some of the developers to leave in protest, which might have been what forced the studio to cancel it entirely.

Another thing to note is that the developer's words appear to confirm all the concept art leaked by Bully 2 Info on Twitter.

If it's any consolation, some of the technology intended for Bully 2 made its way to other Rockstar games. For example, dynamically breaking glass, which the anonymous developers described, was used in Grand Theft Auto V. Meanwhile, NPCs that remembered character behavior were also used in Red Dead Redemption 2. Other in-depth game mechanics initially planned for Bully 2 that were later expanded on include dynamically growing grass and unimportant buildings that you could enter and loot, among others.

In other Bully news, other insiders "confirmed" that Rockstar planned to announce Bully 2 at TGA 2021. Meanwhile, there are reports that Rockstar didn't cancel work on Bully 2 until 2017.