I've uploaded my main game files fine, but I'm confused on how to upload or flag a demo. The docs say that there is a checkbox named "This file is a demo and can be downloaded for free" but I cannot find it.

Additionally, whenever I try to push demo files via butler, it thinks they are the main game files and treats it as an update

What am I doing wrong?

The demo checkbox only appears when your game has a minimum price set! Since it's $0 right now, all files are free.

To push demo files, you need to push to a different channel: if your main game files are in channel "win32", you should push the demo to "win32-demo".