Has Paper2D development stopped?

I agree with the overall stance in your post, but then again, one could argue that Unreal Engine is a 3D engine to begin with and Paper 2D is, from that perspective, a gimmick as well.
There are a lot of dedicated 2D engines out there. So i can understand why Epic does not put all too much focus on it.

But I totally agree on the too-much-VR part.
Personally I start considering exploring VR not before its so common that its available as a Brack Friday Bunduru :smiley:

PS:

When you look at the normal roadmap, you will find that the entire โ€œAIโ€ category is backlogged.

https://trello.com/b/gHooNW9I/ue4-roadmap

So not only Paper 2D is suffering from neglect :wink: