why can't I vote on this, I support it.

Just change the top right for all to installed, and it will only show your installed games;) its by the a to z , but says all. You can change that, then your app, want look so messy you will no longer see any of the demos in you apps;)

I don't know, if I would want this as an automatism. Sometimes I like to show a game to friends, and then I prefer to use the demo version - e.g. Beat Saber or Journey of the Gods.
But there should be a possibility to remove unwanted apps from your library in general. This would help you, too. I added some free apps in the past, that I would like to get rid of.

People are not understanding what this is asking for, if you look at your library, it will still show that you own games that you don't want to see. It doesn't matter if you have it installed or not.

For me I very much agree with this, I hate seeing all the apps I don't want or will not play when I go to "All apps" in my library, whether or not it is installed or not

They already have this option for the Rift so it should be very easy to port over to the quest library option

The solution is simple, just delete the demos by uninstalling them just like you would normal games.
As mentioned by atavener

You can delete the demos, which also frees up some space. To delete them, when you are in your "Library", there is a little option ellipsis (...) in the top right corner of a pointed-at app. When you select that there is a drop-menu with a "delete" option.

It would be great if we could just remove any app permanently from the library.

I agree with this, for example I own Dance Central so i prefer not to have the demo show up on the store and under apps i own since its not needed when i already have the main game.

You can delete the demos, which also frees up some space. To delete them, when you are in your "Library", there is a little option ellipsis (...) in the top right corner of a pointed-at app. When you select that there is a drop-menu with a "delete" option.