Got around to playing it on PS4 and finished it in 1:11 (took my time exploring, particularly in the playroom).
It was OK. I'll address the combat first since so many KH comparisons have been made. For reference I've played KH1, KH2 (including FM+), BBS FM, and DDD. My favorite combat system of them is KH2 FM+.
I think Kid Noctis gameplay was like early KH1. Basic combos, cartoony effects. But not really as good. KH1 is smoother when stringing combos together, especially in air combos where Kid Noctis wasn't capable of much. But you're not playing as Kid Noctis in the final game, so that's fine.
One thing I was very impressed about was the effects for the spells, especially the Meteorain spell and the Raindrops spell. Really big and flashy. But I would much rather prefer the spells autotarget, because I can see lots of instances where you're trying to target an enemy and not being able to get the spell off before they hit you.
Then I got to Adult Noctis. I didn't think it was like KH at all at this point. I didn't think FF XV's combat was like KH in Episode Duscae and I certainly didn't think it was like KH here. Maybe a clunky KH1 or BBS at best (early game too). But I think the comparisons are a bit shallow; it seems to be its own thing.
Once again, stringing combos is just not as smooth as in any KH game. It feels slow and clunky, especially compared to KH2. In air combos, you don't have the same airtime, or maybe rather you can't do air combos as easily (trying to be fair here and might just need some more practice though; any tips?). You don't have the autotargetting spells. There's nothing in KH comparable to the warping in FF XV (speaking of the warping, there were times I was trying to target a specific spot but it would skip to another location I didn't want to warp to; hope that's smoothed out). The effects aren't as satisfying. Also, camera movement as well as framerate are not as snappy as those KH games. Actually those two things contribute a lot to the great feel of KH combat systems.
It's weird but I enjoyed the combat more in Duscae 2.0. This might just be a bad representation, IDK. The mechanics in Duscae were a bit different. But you also had more options and your whole party. I also prefer attacking with square as opposed to circle. Still, even early KH (doesn't matter which one of the ones I listed) feel like you're in better control.
Moving on, the graphics were...kind of underwhelming. Comparing it to other open world games I've played on PS4 like Witcher 3 and MGSV, it doesn't look as good as them, and MGSV ran at 60 FPS while Witcher 3 on PS4 currently isn't worse. The character models in those games are better, and the lighting is more appealing too. Again, this is all based on this demo; the full game might be quite different. It's less blurry than Duscae. As a side note, the game seems to have more or less the same look of it as the FF XIII games with the dithering going on. I'm kinda used to every main FF looking different but it feels like they're using the same technology.
The camera...I thought it was weird the camera was real close to Kid Noctis in the forest area and the playroom, but got more spaced out in Altissia and the Citadel, closer to something like KH2. I was driving the car and the camera movement was too slow. Otherwise camera movement is OK, but with the choppy framerate there are improvements to be made. I thought moving the camera speed to 4 was too fast, while 3 (the default) was a tad slow. Not too big of a deal on 3 though.
The framerate was alright for most of it, with some dips here and there, but it wasn't as good during battles. I didn't think it was much better than Episode Duscae. Warping across to the giant from hanging definitely causes some drops. Hopefully they iron this out for the full game.
As for the sound, the music is great. The Playroom theme is very good and it's good that they played Gratia Mundi (or whatever, lol) in Altissia. They also brought back the original Omnis Lacrima for the Iron Giant fight, as opposed to the arrangement in Duscae, another good thing. One thing that disappointed me is that the sound effects are notably louder than the music, with the music being pushed back a bit in the background. Of course you can modify the volume levels for sound effects, voices, and music but the music isn't quite as clear as it should be. I thought the sound level for the forest area music and the after battle music once you beat the Iron Giant quite low.
To end off, I think Episode Duscae 2.0 is definitely the better demo.