I completely disagree. Demo 2 feels very polished compared to the first demo, especially aesthetically.
I think it's really valuable when the mechanics are directly tied into the porn elements. You think about the setting and story first, then build the game around it. This way, you end up with a cohesive and unique experience, rather than an awkwardly forced one.
Hiding is a staple of this genre and tying it together with the arousal mechanic is genius. Remilia getting aroused by being chased around is fucking zased (helps the setting). Developing this into an arousal management system gives the player a sense of urgency and something to think about in the interrum (mechanically and erotically). Because we're controlling Remilia, it makes sense that we're effectively blinded while hiding. Relying on audio cues is a cool mechanic, but if there was literally nothing to look at, that would create a lot of time in which nothing immediately erotic is happening (bad pacing). Naturally, showing Remilia hiding and her state of arousal fixes this. If you're hiding and mismanaged arousal, it follows that a scene should occur.
This all further ties into the breeding mount minigame. If you don't manage your arousal, you can get caught pretty easily. The mount allows you to relieve yourself, but you have to navigate to it which is importantly inconvenient (good). Unfortunately, the demo included way too many items, so this was never a problem. You could just pop a sedative at any time.
I always thought that this genre often feels kinda lacking in features or things to do. Having some kind of side objectives would go a long way. I also felt they were oddly similar to extraction-type games (ie Lethal Company): Adding collectables or something might fit. I was pleasantly surprised that Namako did exactly this lol