It depends, the 2 still serves Kingsteignton, Bishopsteignton, upper Dawlish Warren and Exminster (places the train can't) as well as that some people may use it to get to a train station, but cutting out Dawlish Warren a few years ago, and then reducing it to every 30 mins, putting those horrible bouncy scania buses onto the route certainly haven't helped. GWR will certainly take away some custom for Stagecoach as you say with a now every 30 minute frequency on Exmouth to Paignton for most people it's not only quicker but cheaper too. I didn't know that the 2 followed the same route as the 2b now though.
Yes the 2 followed the 2B I was on yesterday (between Exminster Victory Hall and Dawlish/Teignmouth) and now the 2B is every hour to Dawlish.
There are many places on the 2 route not served by train as you say. However most Exminster passengers will be to/from Exeter so probably wouldn’t justify the route all the way to Newton Abbot. Exminster could be served by an additional local service.
This is similar in Kingsteignton with most passengers travelling to and from Newton Abbot. Again a new local route could cover this section.
As for Bishopsteignton there are passengers there but not many, not enough to justify a 30 minute service.
So in conclusion, if the train took away Starcross, Dawlish and Teignmouth to Exeter and Newton Abbot passengers, how many passengers would be left? Would it be enough to still justify 2 buses per hour? I believe it’s mostly concessions during the day anyway so fare paying passengers would be very low in numbers particularly between Exminster and Teignmouth.