Most developers are working on other commercial projects, so this isn't a priority, however, it has not been cancelled. Here's a message from Windchimes (the lead developer) after someone asked about it on February 4th, 2020:
"Hey! Thanks for asking <3 Sorry for the late reply. I've been sick so I've been staying off the computer and didn't see this until now.
Honestly, right now I can't really say when there'll be more game updates. Pretty much everyone in the team has been busy with their own projects / freelancing commissions, so progress has been slow. Unfortunately, I haven't been able to find the time to squeeze in time to work on LiD's new updated demo into my schedule lately between holiday season (Christmas then CNY) and my own commercial project which takes priority at the moment. I'll try to reevaluate my schedule and see if I can work something out and get back to you guys later on with a better answer. Sorry! And thank you for the continuous support <3"
Best bet to contact developers/get updates is likely through their discord server, I have included the link below. I am excited too, I also loved the NaNo version! :)