This is the first time i ever heard of this sharepoint feature which manages the properties of a document in any document library, in simple it synchs the properties between the document and custom columns of the document library.
What is promotion?
Every document has its own set of office properties so whenever a document is uploaded to a document library then these properties are updated to the sharepoint columns which is called as promotion of office properties
What is Demotion?
After upload of the document if properties values are changed by updating the sharepoint columns in document library then the values are copied back to document level to make everything in sync.
Practically, when we upload a file to a document library or create a new document using "new" the propeties are promoted. but i still doubt if promotion happens when single upload
This promotion and demotion of the document properties is done by sharepoint with the help of document parser.So if a synchronization of a document has to maintained which has a custom file extension then a custom parser has to be written to do this.