I only used the demo a few times, but that never happened to me (I've obviously got the full version now, but once again I've never had a lockup deleting test level). Some people experience really long times to delete a test level, but mine only take a few seconds. I don't think I've ever had a problem like that.
Oh, and there is no inbuilt copy protection. You'll need an external program.
EDIT: It may be because the demo uses a special executable to test.
Click above for Project Luna demo! Resident Evil Remake is teh fergin' best!