I am using the language that the current UI interface for itch uses for game releases. The fact that itch calls a freely downloadable file that can be part of a project “a demo” is not my decision and I don’t believe that your wall of text response does anything to add to the conversation.
I would like to be explicitly make the game available for free by having the This file is a demo and can be downloaded for free option available for this type of game.
You explicitly do make the game available for free by setting a minimum price of 0. Adding a this file is a demo adds confusion, not clarity.
What you propose would solve the issue of designating the demo version on a free game - which is usually solved by simply naming the file demo version.
What would solve your issue is to have the donate button and the dowload button separated. You will see such a donate button on web games that have no downloadable files. And you will see the download button on projects that accept no payment. Itch's solution to this scenario is the pay what you want button.