The main issue in your implementation is that you want to use the the $scope to share the value of menuOpen between the parent and child directive, but your parent directive has an isolated scope :
scope: {
menuOpen: '@menuOpen'
}
You need to declare menuOpen in a scope shared by both directives, due to transclusion it has to be the parent scope of the parent directive. So, in the parent directive you should not create a new scope :
scope: false,
link: function($scope) {
$scope.menuOpen = false;
$scope.toggleMenu = function() {
$scope.menuOpen = !$scope.menuOpen;
};
}
Then, openMenu is accessible in the child directive. See it in in a fork of your Plunker.