Sorry to revive a dead post here, but would this be possible to do over two modems connected together?
Via the PSTN yes. One is the server and waits for connections, the other is the client who dials and connects.
I would doubt you can just wire two modems back to back and expect them to work, they normally expect ring tone before dialling out.
Correct me if I'm wrong, but if you don't specify the IP addresses at the end of the pppd command wouldn't you, in theory, be able to use phonenet connectors and use this technique with multiple vintage macs simultaneously?
No, the clue is in the name, PPP stands for
Point to Point Protocol.