What is MPEG-4 Part 2?
MPEG-4 Part 2 is an older lossy video coding standard strongly associated with DivX, Xvid and 2000s-era downloaded video. It is not the same codec as H.264/MPEG-4 AVC.
DivX, Xvid and MPEG-4 Part 2
FFmpeg can encode MPEG-4 Part 2 natively and also provides a libxvid wrapper. Its own FAQ explicitly notes that DivX 4+ and Xvid are implementations of the ISO MPEG-4 Part 2 standard.
Where the video was stored
AVI became the most familiar container for DivX/Xvid-era files, usually paired with MP3 audio. MPEG-4 Part 2 video can also be carried by MP4 and other containers.
MPEG-4 Part 2 vs H.264/AVC
H.264 is MPEG-4 Part 10, also called AVC. It is a later and substantially different coding standard. Calling both simply “MPEG-4” creates one of the longest-running sources of codec confusion.
Is it obsolete?
It is no longer a normal choice for new distribution, but large personal, archive and internet collections still contain DivX/Xvid material. That makes recognition and decoding support useful even if new encoding is rarely justified.