The most crucial difference which produce significant changes in performance is slippage. Transaction costs' impact may be not so obvious but you start to notice it after 100-200 trades because impact accumulates.
From my personal experience with both Live and Demo, I find the demo account is a tool to learn about forex in-depth and how to trade using their platforms. The live trading account is where real risk and capital is involved, unlike the demo account.
The demo account is risk-free for trading, whereas the live account is all about taking risks. There are also certain changes in slippage and price difference in execution.
It's impossible to learn trading 'in-depth' with demo platform, rather you can learn how to click buttons, open or close positions or choose lot size. Even in terms of technical analysis tools, most broker platforms are inferior to TradingView.
A demo is a tool that has no real money or risk involved, the trader can trade on it without any emotions and build strategy and skills. The live account is where the traders use all the demo experience to make profits but the risk and capital involved in real with emotions.
Despite what people think about the training method of trading, you will feel some differences on a real account.
I don’t think that demo accounts have any similarity with live accounts apart from the trading platform features. This is why I never recommend demo trading for more than a week because this much time is enough for a trader to get well-versed with the trading platform. Your real practice starts when you go live. So you better spend more time in the live market with small amounts instead of wasting your time on a demo account.
Demo accounts make you familiar with the live market conditions. They help you gain confidence in risking your money in the live market. They also give you an idea of how good your strategy is and whether you should apply it in the live market or not.
There are differences yes but one should never go live until getting experienced enough to place profitable trades. Practising on a demo account helps a trader to choose suitable tools and decide a particular strategy as per their goals.