I'm using a tool called Physics 2d Extension for creating a hanging object. It's a long object attached by two ropes. I know AC has its own physic, would AC be able to work with this addon?
Work with it in what way? I'd advise you try to keep it as separate as you can - certainly AC shouldn't "mind" it being used in the same scene. But you should still be able to add/remove it, or make it a Hotspot, as you would any other object.
I would recommend keeping the Hotspot a separate GameObject to the rope itself. So long as the rope is not on the Default layer with a collider, it shouldn't interfere with it.
I don't know how you'd "cut" the rope using the other asset, but if there's a script function that performs that, you can call it by using the Object: Send message Action as part of the Hotspot's Interaction - that action lets you run a public function in a script.
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A hot spot. I press an object (hotspot) that's attached to rope and the object drops down, but held by rope.
I don't know how you'd "cut" the rope using the other asset, but if there's a script function that performs that, you can call it by using the Object: Send message Action as part of the Hotspot's Interaction - that action lets you run a public function in a script.