To me it looks like the channel is clipping to 255, i.e. max scale. If you zoom out on this scope by changing scale, it simulates the zoom out before getting the new data, hence the reason you briefly see the line.
It's bust, send it back.
If you want to debug it, my first guess would be the Ch2 attenuator or input amplifier, then possibly the ADC switching matrix (two relays), or possibly even at slow sweep speeds, one of the ADCs being faulty. Try seeing if you can trigger off the dead Ch2 (use square wave from calibrator, set trig to AC coupled, 0V amplitude, and enable counter in Utility menu), if you can then it's not the input frontend, but the ADCs or the drivers/mux for them.