The studio is moving 100% on to the Gears IP, so while it might not technically be cancelled you can basically assume no serious work will be done on it for about two years, minimum.
Then if their Gears installment is successful MS will either let them make this new IP or have them make another Gears (like they did/do with Bungie, Lionhead, 343, and Turn10).
So yeah, I'd say no chance we ever see that spy game. Either Gears is a success and Black Tusk turns into a Gears farm or it isn't a Black Tusk is shuttered.
The real fucked up thing to me is that they brought in Rod Fergusson to run the show, when he just left Irrational to take over a new studio of his own in San Francisco. Why not just let Fergusson build his own studio in SF (stealing talent from 2K after they promised to let him make a new IP then pushed Mafia on him), and go from there? Hell, it'd likely be easier to retain Kenneth Scott if he's collaborating with a team in San Fran than Washington, so why not have him help Fergusson and breath some new artistic styling into Gears?
Screams a lack of faith in Black Tusk's new IP, a risk averse management philosophy, and a desire to minimize just how many first party studios they have if you ask me.
They'd rather send money and see a game come back than get their hands dirty with actually managing studios. This is the fundamental difference between the Xbox people at Microsoft and the Playstation people at Sony. MS' people view software support as a box they need to check off and therefore apply the #1 tool of problem solving in MS' corporate philosophy: throw money at it. Meanwhile Yoshida and co. actually want to be involved in the creation of new and exciting video games for the sake of making new and exciting video games.