In first place, you should not rely on the body name. Names are unique in godot, so when you isntance the first bullet, it may get the name "bullet", but when you instance a second one with the previous still alive, you will get something like "@[email protected]" or whatever, and the if condition won't work. You can add to the bullet a variable called for example
im_bulletand then ask
if "im_bullet" in body.
Second, i prefer to use
_on_body_entered in the bullet, and make a function, lets say
die() to enemy. So you connect bullets
body_entered signal to a function in bullet's script, and if its an enemy, you call die from them. I like it better that way, aldthough i cannot say is better. Also, i DONT think body entered detects area (i think Area2D isn't body). That's why i tend to do this way.
Lastly, in larger scense, its more organized to add nodes to groups. Let say that in ready function of your enemy, you add it to "enemy" group:
Then, in your bullet script you check:
func _on_Bullet_body_entered (body):
I've tested all of this and works in my pc. If it does not work in your, check connections or share me the project and i'll see.