RE5 was recently updated, it stripped GFWL in favor of Steam, and finally after 6 years of waiting we get the Untold stories DLC (also known as RE5:Gold). However GFWL wasn't the only thing that was stripped, the GFWL version had a fully functioning coop mode that was easily enabled by modders:

It was so easy to enable, that many of us hoped that Capcom will officially add it to the game, but nope, they actually made an extra effort to remove it completely and even potentially lied about it.

Here is what Capcom had to say:

To clarify though, the split screen code that was ripped out from the PC build is from the console version.

As some of you may know, MT Framework is our multiplatform development tool/engine that is utilized across several platforms. The aforementioned split-screen code is an orphaned code base from the PS3/Xbox 360 SKU which simply does not work on a PC.

The crux of the issue is that the PC code base has no concept of multiple controllers. In other words, if you plugged in two Xbox controllers, RE5 has no way of figuring out which gamepad controls which character -- or what happens if one player uses a KB+M versus a gamepad. It's a difficult problem to solve since the original game's logic wasn't designed with multiple controller devices in mind.

Here is what a modder had to say:

I don't understand why you claim the code "simply does not work on a PC". As I was one of the key people who worked on the split-screen mod that enabled it on the GFWL initial release version for PCs. I can confirm that all the code is FULLY functional and it worked flawlessly for the GFWL version. We did not add anything extra to the game at all, it was simply enabled. The only problem was that the keyboard would control both characters so it was forcibly disabled. The game has no problem at all distinguishing between two controllers. Evidently the game knows to assign PAD1 to Player1, PAD2 to Player2 vise versa. Otherwise no characters would have moved at all.