Really? Definitely looks like something a simple phone should be able to process... Are they not wearing phones on their heads in the demo?!
This "Publish > Feedback > Iterate > Repeat" loop doesn't just apply to smartphone apps, you can basically do this with anything in life, from hardware to mixology.
I guess you could say the same thing about LLMs, since the initial models were terrible and just basically demos, they shouldn't actually have published those at all?
I again disagree.
"Publish > Feedback > Iterate > Repeat" loop works when users can build on it from a previous reality that they can compare against.
Physical demos that propose something that a user has no point of comparison with (new paradigm) you can either show a sketch/concept of what you want to do (to a tecnhical audience). Or build a semi-realistic demo to a non technical audience.
Anything in between will probably be met with confusion or people focusing on details that are not the concept that you are showcasing.