This is actually quite cool; I like coming up with these sort of ideas as a hobby for fictional game systems/platforms that will almost certainly never come out unless I suddenly inherit billions of dollars out of nowhere. But I always liked this concept and figured a few ways it could work...though in reality that involves it not working quite like this patent seems to suggest.
For starters they should have a means of determining the amount of playtime/scope the demo slice covers. That can be handled by just using metadata in the game code that way if a player wants to create a demo while playing it'll use the current chapter or level as a slice to compile the demo with. There's of course though the question of sharing that demo with people who don't actually own that game. In that case either the player who generates the demo has to literally compile a build of the demo for download (the next-gen systems allowing parts of game files to install selectively helps a lot with this), or (better solution) the game is also available for streaming and the recipient basically streams the game but as "your demo slice", without needing to actually own the game or even subscribe to the streaming service if they're on your Friends list.
You could just ask "why not just demo the streamed version?". Well if a friend creates a demo slice with their copy of the game and they've purchased DLC content, if you play that demo slice you can also play with the DLC in theirs. This of course also assumes the streamed version of the game will provide DLC content updates to it when those are available. In fact, this feature alone would probably necessitate demo creation to streamed instances exclusively for the recipient, because a player making a demo build from their own version for download would 1): require storing that build on the cloud (taking up server storage space, for what can amount to a glut of demo builds with duplicate assets), or 2): allow peer-to-peer file transfer (I don't think Sony would allow that at all, for security reasons). If you just let the player generate a demo slice as a list (or as a batch file if you're familiar with how batch files work on Windows), then you don't need duplicates of data on cloud storage, that saves on storage costs.
But that still doesn't give a good reason to have players build their own demo slices; after all Sony could just provide their own demo slices to stream for client devices that give access to the DLC content themselves. So when you think it all through does letting players build their own demos really seem like the best route here? Probably not. Unless you want those player demo slices to also provide a way other players can recreate the actions of players making the demos. But I can see that being better done with them just uploading some generated scripts that can run at the recipient's discretion, while they're playing that demo slice streamed (or locally if they happen to own the game), able to use the uploader's run as a guide with annotations and AI-controlled playback segments seamlessly in the active gameplay session, letting the recipient take back over gameplay duties automatically if there's something about the uploader's playstyle they want to try recreating. You can think of it as a somewhat robust training tool.
That's probably really the best way for them to do it: just provide slices of demo content that can be streamed to clients, even for those who own the game (but may not own the DLC, that way they can at least play portions of the game with DLC content and maybe just stream the DLC content in sync with the non-DLC content running locally on their system). And if players want, they can upload "scripts" of their playthrough in those portions that can be used by other players for seamless live training/recreation guides, the uploader can even make annotations that the client can then turn on/off easily while playing the demo, and select a state to either play the demo slice their way or trigger playback of the uploader's playthrough in that part, all done seamlessly, with high granularity level.
I hope this is also something Microsoft provides for their platform, though with that being said I understand this patent isn't really describing what I just described at all. It's just that I'd see what's been described as an optimal way of doing something similar to this and maybe even adding some other bonuses on top.