What is the exact criteria for bouncing an inactive owner and opening up the team for someone else to take over? And is that criteria/process automated?

Right now there is no way to bounce an inactive owner.

I expected pretty much the opposite. I say that because, looking at the 2013 and 2014 standings for MFN-2, 28 of the 32 owners are different! Was there some kind of massive re-start of that league?

If a player doesn't renew by the end of the season, they are dropped, but there's nothing that will drop a player during the season. We've discussed bouncing inactive users after a certain time period, I have some ideas on the table about it, but haven't fleshed them out yet. I have added logic that the AI will re-sign players in the end-of-season league if the owner is not returning - this was just added, so it hasn't fired yet. I added this after seeing what happened to several teams at the end of this last season in MFN-1. I think MFN-2 and MFN-6 haven't had the end of the second season yet (which is when the biggest issues are)