To add onto this, the item does exist in the game, and you can acquire it, but its in the dungeon and past what is more or less the "final" boss for the demo. Getting access to the bomb and using it though will lead to the end of the demo message, and even if you don't blow up the spot with the bomb once you leave the dungeon you will get the end of the demo message, so whenever you DO go for this option be sure you're ready to let go of the save, as picking up the bomb seems to flag the game as over in general.