In my experience this just encourages the team to build an application that's a glorified power point presentation, because the set of things that's useful for demoing stuff is a pretty small subset of what's actually needed for usable software.

This approach only works if your team has the discipline to not output bullshit that just improves the demo, and if the team does not have incentives/pressure from those above them (i.e. whoever decides their salary/career progress) that only revolve around these demos.

Otherwise at some point the software is "ready" from a "we have demoed all the features" perspective, but you still need to spend another 6 months building out all the invisible things that make it actually releasable.