The 360 does still download game updates.
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Passive income only accumulates in Fable 3 while the game is running. You'd only get the passive income with the game turned off in Fable 2.
Got everything update and checked out my Fable 2 save, I got $658,000 as soon as I logged in. I had no idea what I was doing, so I kept playing my new save.
Does Fable 2 run on the Xbox One or Series X? I think my 360 optical drive is dying, so debating getting a refurbished newer model.
Any passive income in 3 used to be moot because you could join your friend's game, have them slide their entire stack over to you, and then choose all the good choices that cost money without draining the treasurey. It would be interesting to see since you probably cant play online on the 360 again, making the AFK passive income one of the only ways to make all the good choices AND still save the kingdom. I wouldn't bother connecting it but I doubt any harm will come from doing so.