So, I saw that many HG authors bring down their demo´s after submitting their games for publication. Is it some sort of a mandatory thing or is it exclusively the author´s choice to do it or not? If so, what is the reason why they do it?
Because people will play the demo instead of buying the game.
Given that Choice of Games is investing money and time in publishing Hosted Games in a saleable way, it is definitely ethical to take down the demo.
If you want to give a free version to friends, you can have a ‘private’ version on Dashingdon’s.
Games are hosted for free to be played when being written in the hopes of having people interested to beta test them and provide feedback. Once they’re submitted they’re on their way to be published so they are taken down. Part of the deal is that the HG platform is the only place it’s made available as well.