Statement 1 states that Patanjali`s Mahabhashya mentions Kautilya. This implies that Kautilya is discussed or referenced in the text. However, there is no mention or reference to Kautilya in Patanjali`s Mahabhashya. Therefore, statement 1 is incorrect.

Statement 2 states that Patanjali`s Mahabhashya is a book on grammar and references to historical personalities are only incidental. This means that the book primarily focuses on grammar and any mention of historical figures is not a central theme. This statement is correct. Patanjali`s Mahabhashya is indeed a treatise on Sanskrit grammar, specifically on the grammar rules provided in the foundational text of Panini`s Ashtadhyayi. While it is possible that there might be incidental references to historical personalities, they are not the main focus of the book.

Therefore, the correct answer is option 2 - Statement 2 only.