You've played it wrong. It's a survival horror game where you have to actually loot before you do anything else. The gun didn't stop working, it was in TEST-MODE to be able to understand how it works. After you've left your office room It returned back to it's default state meaning that it needs ammo. Make sure to play it again but loot and pay attention to the environment and you're going to have a blast. Thanks for playing!
Thanks for the reply, I realised that shortly after and got to finish the demo. Overall the game was good, though it felt oriented at younger audiences (which isn't necessarily a bad thing, don't wanna criticize). I think it'd be beneficial if it was hinted somewhere that new ammo must be looked for, I had actually tried looting during my first few runs believe it or not XD. Perhaps that Yellowhead guy could briefly mention it, or a poster on the wall? Either way, it's your game and you ultimately decide how to design it. Keep up the good work!