So the explanation from previous games that demons were the first race created on Rivellon is not a canon?
In any case, it seems that Damian will return in the Fallen Heroes and in the trailer, if I am not mistaken, Lord of Chaos was mentioned, so maybe a new game will explain the place of the demons and their god in the world, and the relationship of the Lord of Chaos and God King
"Canon" changes from game to game, often contradicting itself and adding in new gods or demigods which were not mentioned before, then go back to being not mentioned in the next game.
Fallen Heroes is on "indefinite hold", which probably means "we don't want to use the word 'cancelled', but...".