"Was working on" in the sense of "had worked on while it was active", or in the sense of "is actively working on right now"? The former is plausible, but the latter seems unlikely. WaDF2 is dead, and has been dead for a few years.
As far as I can tell, xtr1m's work on WaDF is limited to naming some (or all- the credits are vague) of the levels, and collaborating with LPChip on one track for the soundtrack. The credit (and everything else I've seen concerning WaDF) doesn't imply that xtr1m actually worked on the making of the game itself.
Perhaps he meant he had made some music intended for use in WaDF2, while it was active? (Although, all the music on the Niffpage intended for use in WaDF2 is Nifflas-composed.)
Or maybe Nifflas or someone else is secretly working on finishing WaDF2. But I don't think that's very likely at all.