GTA 5’s Story DLCs, Bully 2 and Midnight Club 5 weren’t cancelled in favour of GTA Online according to devs speaking anonymously.

According to sources in 2014 Leslie Benzies (One of the most important producers at Rockstar) and the Housers got into a huge disagreement due to Leslie’s desire to focus more on Online titles solely over Single-Player for the future of Rockstar. Proof of this is what Benzies is currently making, an online Fortnite-esque “platform” titled Everywhere.

This disagreement reached a breaking point resulting in Leslie Benzies leaving the company in mid-2014, Alongside him, a large number of the developers who were working on GTA 5’s Expansions left the company alongside him, pausing the work on the DLCs indefinitely as Rockstar got to hiring new devs and training them to work with RAGE.

During this, the GTAO team was making great progress on their work and seeing huge success so Rockstar decided to lend them more resources to build out GTAO which ultimately paid off hugely.

By late 2015 the dream of a GTA 5 story expansions had died as the Housers decided to shift all their focus to Red Dead Redemption 2, By 2016 a Liberty City expansion to GTA 5/GTAO had been prototyped but ultimately also cancelled as RDR2 kept growing in scale, adding in New Austin very late in development and expanding the game's insane scope even further, the scope of RDR2 got so large that every single Rockstar studio fully dedicated themselves to RDR2, placing Bully 2 and all other ideas on ice until further notice.

Ultimately, RDR2 became by far Rockstar's largest ever title in sheer scale and detail, GTAO made sure Rockstar was secure financially during this time which allowed them to fully focus on one singular title over releasing multiple smaller titles so in that way, yes GTAO affected how Rockstar makes games.

Rockstar now focuses on Bigger games that take way longer to develop over smaller games that release more often.