The Demo Signal has a debated purpose and use. Some people say it's used for testing, and should not be used in normal advtrains procedures. Others say it's good as a signal embedded into the track.
A normal usecase in normal advtrains is that of a futuristic monorail. Signals hidden inside the support columns can give the illusion that the trains control themselves of their own accord.
Another usecause is with overhead signalling, using small arches of blocks to support them. This looks very clean, especially with grey stonebrick.
Below is a use of them in an interchange station, where there is no space for signals on the ground.
And here is a use on a quadruple track viaduct, where demo signals provide clear, unambiguous signalling for trains: