Yep I hope that mindset never dies. Meta is one of the last engineering-first companies in big tech and willing to live demo something so obviously prone to mishaps is a great sign of it. It's not unlike SpaceX and being willing to iterate by crashing Starships for the world to see. You make mistakes and fix them, no big deal.
One of my internships was preparing Bill Gate's demo machines for CES. I setup custom machine images and ran through scripts to make sure everything went off w/o a hitch (I was doing just the demos for Tablet PC, each org presumably had their own team preparing the demos!)
Not doing it live would've been an embarrassment. I don't think the thought ever crossed anyone's mind, of course we'd do it live. Sure the machines were super customized, bare bones Windows installs stripped back to the minimum amount of software needed for just one demo, but at the end of the day it sure as hell was real software running up there on stage.
The same unwarranted sense of confidence that tells them this product is worth making tells them that they can easily pull off a live demo. This is called "culture fit"
Pitches can be spun, data is cherry picked. But the proof is always in the pudding.
This is embarrassing for sure, but from the ashes of this failure we find the resolve to make the next version better.