Everyone is going to give different weights to the various rules and criteria for judging demos. In a community that strives for pushing boundaries, these existential debates are a staple. It was assembly vs C/C++, it was pixel art vs Photoshop, mouse vs Wacoms, chips vs raw CPU, MODs vs MP3, soft vs hardware rendering, party version vs polished release, handcoded vs demo engines, secrecy vs opensourcing, compatible vs "runs-on-my-machine", design vs tech, closed groups vs collaborations, fully self-contained vs using system assets like fonts... That's healthy.
I personally value both pacing and merit. I love demos where I ask myself "how did they do that!?", and I love demos where I forget to ask that question while I'm watching them. This one, I found rather uninspired, and obviously very weak in the merit department. It clearly does not deserve a 2nd place; there's just too little of value that the authors brought to the table. In fact, their biggest contribution may be to open the door for other sceners to use UE4 for great things.