Just got around playing the demo and I liked this a lot, definitely going to follow the development when I can! Honestly, seeing everything in action it's weird how long we took until someone tackled this idea seriously.
Some of my thoughts on the game:
You nailed the mood, it feels gloomy enough to remind you of SMT, but don't strip away the more inherent charm of Touhou. This of course is made possible by great pixel art and music, the dungeon textures are by far my favorite part in the game's visual for what I've played, but I also love how accurately the classic SMT enemy style is replicated here.
Althought I said I like the music, I'm mixed towards some of it. All the dungeon themes are awesome, same for the enemies apearing on the screen before the action starting taking place, but I'm not a big fan of the battle themes. They grew on me after a while, but I do think they are way weaker comparing with all the other tracks in the game. That said, they all at the very least are a good mash of SMT and Touhou.
The battles are amazing, really. Like SMT or Etrian, the early enemies are powercrept fast, but you need to respect the sleepers every time a new one appears and I respect that. I always love when battles are less about enemies with big numbers who can't kill you, but take forever to die and more of the good old "kill fast, die fast". I did not expected Sumireko to be this customizable, I can see myself messing around with countless builds to better suit my selection of characters and already in the demo I had those moments of me forgetting to progress the game because I was too invested in finding a specific sleeper to make my team a tiny bit stronger.
That customization is not exclusive to her either, even though the fusion mechanic is yet to be seem, I squeezed a lot of fun transfering skills and affinities between sleepers. It's a nice layer of complexity that not only rewards the player making the good meta calls for the dungeons and bosses, but also allows you to keep characters you like for longer than you would ever hope in a SMT game.
The hijack mechanic is neat, I got scared because I'm terrible at the genre, but it's simple enough to a potato level player like me to not only be able to get every possible enemy, but also learn to do the paterns consistenly. Also, it's just me or VIT affect your HP in those segments? I noticed after a while I was able to take 3 hits instead of 2.
One thing I was never a fan of in the early SMT titles was how the demons were so capitalistic, a stingy guy like me rarely summoned demons except when I really needed, but I think the battery mechanic does improve a lot in the idea. You still have the same strategic side of the summons consuming your resources at every step, but this time they don't directly affect your money as you can always wake up to get yourself a nice free recharge (the recharging items are pitfull for how much they cost early on, though, but this never really became a problem to me)
And about the dungeons... the demo one felt more like a mid game dungeon than an early game one because of the amount of mechanics already thrown to the player at once (at least by SMT I or even Etrian standards). I don't mind it, the dungeon layout looks nice in the automap and it's easy to to find where you need to go as long as you respect new enemies insteady of reckleslly charging all the way to the top after starting a save file. The traps are fine I don't hate any of then, but they do their job to scare the player and make so you have to think at lest a bit to travel through a couple rooms.
...That said, I could do it without the teleport maze, I never actually met someone who liked this gimmick in any Atlus game. In the context of the demo it is on a more "side" part of the map, so I don't mind it there, but I can see myself losing interest if I got exposed to an obligatory Eridanus 2.
I can see how Sumireko may not exactly be the most exciting poster girl to the fandom, but playing the game I quickly realised how perfectly she fitted the job description for the playable character and that feeling just grew more as I played for longer. I appreciate when the choice of characters seems meaningful enought, although shoving in your favorites is always a welcome joy for making you own fan games.
A couple nitpicks and smaller feedbacks:
-SMT has a bad record or inconsistency between playable characters, so a way to let your player knows they are distribuiting points to essentially a blank slate they can quite literally teach any skill in the game is appreciate to drive off that fear off "I may be putting points on an useless stat". Maybe show the player Sumireko's starting skills so we can at least recognize she will be learning more can be a good start without straight up telling the player "Hey, do whatever you want, it really doesn't matter!"
-Old SMT games and EO are sometimes terrible at teaching you important stuff, I don't think copying this aspect of the games is a good idea. Someone who played both or at least on of them can make assumptions about how everything works, but the game has it's fair share of unique stuff that deserves better explaning. For instance, the buffs in the Special option are a god sent, but I only learned how to use them in the Remains of Blazing Hell.
-I saw a couple people disliking the punishment for taking a "game over", but I actually enjoy how it's done in the demo. Comparing with SMT, a game over essentially means you lost all the map you explored, all the itens, all the money, all the recruits and all experience you gathered before the game decided you would die because of a surprise attack. So in comparison, keeping everything, but getting a single level down doesn't seem this big of a deal as long as the game don't scale on you losing 3+ levels for death later in the experience.
-I don't understand why the dungeon entrance has a icon indicating it's an exit, but the gate connecting to the Remains of Blazing Hell don't have any map icon at all, you can guess where it is after finding it a couple times, but I don't understand why this isn't a thing when even SMT I already had indications for exits/area connections.
All in all, the positives outweigh the negatives really well and I can't wait to see the game getting further in development to completion! With a bit of polish in the clarity I can see this being a fantastic experience much like the games who inspired ADiA!