It doesn't work properly on my 500 at all. It's a rev 5a with 1.3 kickstart. I have the trapdoor 512kb expansion and stock 512kb cchipram, but removing the trapdoor expansion makes no difference.
On the a1000 Phoenix though I have OCS Denise with Agnus 8372a and kickstart 1.3. I was running with 1MB chipram and the demo had same problems as before. I also reconfigured it for 512/512KB chip/slow and that made no difference. But now that I have installed U60 chip and have 1MB chip and 1MB slow it works fine. If I switch to kickstart 2.04 the problems return.
Just thought it was a bit strange
I thought what Toni.Willen said above was correct, bit it seems that installing this U60 GAL chip makes the demo work on ECS Agnus.
What you are saying about low chipram needing to be free makes sense but I don't think it's the case here, as the demo works fine on standard A1000 with only 512KB chipram- but not on A500 with 512KB chipram and no slow/fast.