The damper pedal doesn't work during demo song playback — is this normal?

Yes, this is normal behaviour on some Kawai digital pianos. Certain models disable the damper pedal and other controls during demo song playback to prevent accidental interruption of the demonstration.

To use the damper pedal normally, stop the demo song playback and switch to manual playing mode. If you prefer to control the pedal during playback, check your piano's settings menu for options that may allow this — not all models support this.