I figured this game out:
Rockstar approached a small Japanese developer to turn MANHUNT into an MMO. They got to the first playable, and the deliverable caused several R* executives to have an aneurism. Like a collective aneurism, where a whole room of Scanners or Witch Mountain babies were actively messing with their brains. In the aftermath, the project was abandoned, only to be scooped up by... who's publishing this again?