There’s a long-standing tradition of people creating realtime graphics software on personal computers that doesn’t offer any interactivity. They are indeed called demos and the community is called the demoscene. It goes back to the late 1980s and had a golden era in the mid-90s on Amiga and PC. (Pre-Internet, watching and making demos was one of the few socially and creatively oriented things you could do for free on a home computer.)

To be pedantic, this isn’t a full-blown demo. Small demos are called intros, and a category of them is the size-constrained intro (e.g. 1kB or 4kB). So this could be either a small intro or an effect as part of a bigger demo.

It’s worth looking up some of the small intros. People can squeeze entire GPU-raytraced universes with music into a few kilobytes.