Beyond Good and Evil 2 is still in active development, Ubisoft has officially told Eurogamer.

Recent reports from Insider Gaming have prompted Ubisoft to deliver a statement on specific games, including Beyond Good and Evil 2. Sources told IG that the Prince of Persia devteam has been disbanded, with multiple team members moving over to other projects, such as a new Rayman game.
One of these projects is also apparently Beyond Good and Evil 2, which has remained in development for quite some time; Ubisoft showed off BG&E2's first gameplay footage half a decade ago with a cinematic trailer also releasing in 2018. Now the French games-maker has once again commented on the sci-fi sequel.
In a statement to Eurogamer, Ubisoft confirmed some managerial changes with the BG&E2 team and said the project is still alive:
"With more than 20 years as an award-winning game designer and creative director, Fawzi Mesmar has been instrumental in the successful launch of over 20 video games. Mesmar previously collaborated with the Beyond Good & Evil 2 team as VP of Editorial. In his new role, he's focused on continuing to build upon the vision set forth by our late friend and colleague, Emile Morel," Ubisoft told the website.
Emile Morel, the game's previous creative director, passed away unexpectedly in 2023 from a brain aneurysm.
Fawzi Mesmar, who was recently promoted to creative director on the franchise, also put out a statement discussing his current role:
"Today I'm glad to share that I joined Beyond Good & Evil 2 as Creative Director. I have been working with those peeps for years now on this ambitious game and witnessed their talent firsthand.
"I am standing on the shoulders of creative giants that have supported the team before me, and I look forward to continuing to craft a game that is truly unique for players to enjoy."
Ubisoft hasn't said much more about BG&E2, but it's also possible the publisher is trying to adapt some sort of AI gen tech alongside the game in order to facilitate better user-generated content structures and economies.