It's not clear how he even learned about it, but Ausir over at The Vault has posted a few details about a previously unknown "Fallout Extreme" project that Interplay was working on back in 2000. It probably wouldn't have been very appealing given its Xbox focus, but I don't see how any squad-based Fallout game could have been worse than Brotherhood of Steel:
Fallout Extreme was a canceled squad-based first- and third-person tactical game for the Xbox, using the Unreal Engine and developed by Interplay's 14 Degrees East division (co-developers of Fallout Tactics). It was in development for a several months in 2000, but didn't really have a concrete development team and never made it out of concept. After it was canceled, Interplay's next attempt at making a console version of Fallout was Fallout: Brotherhood of Steel, this time for both the Xbox and PS2. The game's preliminary logo and a single piece of concept art accompany the article, too.
I have recently managed to acquire some of the information about this ill-fated project. For now, I have information about the game's story, but I should also post a detailed description of its gameplay system soon as well.
It is unclear when exactly in the Fallout timeline the game was going to take place. According to the summary in a design document, "almost a century has passed" since the Great War, but it's probably just an error that would have been fixed in the final version of the game, just like the "I was born just after the bombs fell" in Fallout: Brotherhood of Steel.
Concept artThe Brotherhood of Steel (judging from the concept art, probably the Midwestern branch from Fallout Tactics), the "once silent organization", has been expanding and seizing more and more territory under their control. Their area of influence stretches as far as Alaska, where the Brotherhood's new headquarters is now located. The Brotherhood's agenda "leaves little room for the survival of radiation or FEV outbreak victims" (which actually sounds more like the Enclave than the BoS). Local humans are either drafted into the Brotherhood's ranks as cannon fodder or enslaved, and mutants are outright eradicated. It is the Brotherhood that the player would oppose during the first half of the game.