Prequel isn't right, because it's detailing events that are clearly happening around the time of the initial demo, which supposedly isn't the very beginning of the game (might be for all I know, but I'd expect a little more intro).

I see it as a sort-of trailer. Or a little set of miniature events that happen that weren't worth putting into the game, but are neat on their own. I don't have any problem with it - I think it was pretty neat.