In some ways, yes, it's a demo, and in some ways it isn't.
Some companies try and release demos that are just the opening tutorial level, while others release demos that are a part of one of the better levels in the game. In the end, it isn't always a fair display of the game experience. What a good demo should do is give you a taste of what is to come, but some games are way too slow at the start.
I would DEFINITELY say Fable 2 is way too slow at the start, and I don't even know if the first chapter would offer enough to get someone interested in the game. But the Brutal Legend demo, on the other hand, is not only a good demo but a good sample of game design. It introduces the player to the world and characters, but it doesn't necessarily baby them through the gameplay. It takes maybe five minutes to learn the basics before you're moving on to more complex stuff, tosses you into a vehicle and throws in a boss fight for good measure.
The way I see it, more games need to just throw players into the game head first. Brutal Legend does a good job of this, Halo did a good job of it, and Resident Evil 4 tore you a new asshole by teaching you the basic buttons and then saying "Here's a shit ton of enemies and a fucker with a chainsaw! Have at it!". But that's the sort of experience that gets your jaw dropping, heart pumping and the desire to keep playing going. Call of Duty also does pretty decently speeding you through the tutorials and getting you into the game.
Fable 1 and 2 both take too long to get into that sort of action. It may not be a fault of demos themselves, but of the game developer.