Aesthetically, this is quite nice. Definitely has the potential to become a fun, charming game.
As for the gameplay, it's mostly smooth. But, the input mapping desperately needs some attention. I know that you're planning to basically rewrite everything, but this demo's input mapping is exceptionally rough. So, even for a demo destined for obsolescence, I'd still suggest an input polish pass, for usability.
First, the binding. There's no way to bind camera movement to a gamepad's right analog stick or the mouse. There's also no way to bind actions to analog inputs (e.g., crouch to a gamepad's left trigger). And, axes are inverted (positive is down/right, negative is up/left). Although Unity's built-in input manager is far from ideal, these issues are all solvable while using it.
Then there's the default controls, which are nonstandard, to say the least. The default keyboard controls are the arrow keys for movement and WASD for the camera. Gamepad camera controls are pause to look up/right and select/back to look down/left. The camera zoom gamepad button is the bottom face button (A on an Xbox controller). Jump is the top face button (Y on an Xbox controller).
As a side note, if you want to automatically recenter the camera vertically, it should only happen when the player is moving. A stationary player is most likely looking around intentionally.
Finally, a couple of minor notes. I noticed while climbing a tree that the puff particles continued to emit while stationary on the tree. They seem to be set to emit over both time and distance. And, when you walk up the purple ramp near the start, you're stopped at the top by the corner of what I assume is the top terrain's box collider, which extends beyond the rounded corners of its mesh.
All that being said, thanks for releasing an early playable demo! I'm definitely interested in seeing where this project goes.