How a demo becomes a demo?

I'm wondering how an instrument is chosen to become a demo.

If i build basses, I'd take to NAMM a good sounding and looking one of course.
After, as customer, I would have no problem to buy it a little worn.
Instead it's funny when you read an ad about a bass built for the hyperfamous bassist "X". Well somehow that bass was rejected and now a big deal has born?

So what's a demo?
A first choice - fallen down - instrument, or a second choice bass with even purpose made defects on it?