I had the same issues as you and would get the same error as you in the console. I managed to find a workaround for it.
Type demoui in console and press enter, then click load in the top left corner of the demoui tab, locate your demos folder in the garrysmod directory (SteamLibrary\steamapps\common\GarrysMod\garrysmod\demos\) and press open on the demo file you would wish to play.
Let me know if this worked for you.
Update: Garrysmod just pushed a new update that should have fixed this fully, no longer any need to bypass it with demoui.
So you don't play demo in console then put whatever demo you need. It should say demos on your menu screen for you to access. If this doesn't help try to follow this guide.
I had the same issues as you and would get the same error as you in the console. I managed to find a workaround for it.
Type demoui in console and press enter, then click load in the top left corner of the demoui tab, locate your demos folder in the garrysmod directory (SteamLibrary\steamapps\common\GarrysMod\garrysmod\demos\) and press open on the demo file you would wish to play.
Let me know if this worked for you.
Update: Garrysmod just pushed a new update that should have fixed this fully, no longer any need to bypass it with demoui.