Bully is one of the rare IPs from Rockstar that was a unique concept of its time but was never followed up by the GTA developer, but they did have plans.
We have heard about Bully 2 multiple times by now, even getting to see some concept art from the canceled project at Rockstar Games, but the game was actually in development multiple times from 2009 to 2017, and was canceled at different stages only to focus on the other projects at Rockstar Games. Last year, VGC shared a story on the development of Bully 2 confirming that it was considered at various points going as far back as 2009.
The most recent leak regarding Bully 2 comes from a user Tez2 on the GTA Forums, who has previously shared details on unannounced Rockstar Games projects. He clarified that the game was in development and was canned in 2017 so that Rockstar Games could focus on the next Grand Theft Auto, which in this case is GTA VI.
This was verified by Yan2295, who is a known Rockstar Insider. Although he has stopped sharing information on their projects, he was rather active in the past. So there are two sources now that verify the information about a Bully sequel being in actual development, and then getting canceled to focus on other projects.
Bully was first released in 2006 for the PS2 and it was later ported to the Xbox 360 and PC. The game is playable on the PS4 with a digital copy available on the PlayStation Store, and the Xbox One through backward compatibility.