Demons in Frieren are explicitly stated to be a different species than humans entirely and are explicitly stated to utilize human speech for the sole purpose of getting humans to lower their guard in order to devour them. They are explicitly shown to be exclusively murderous and cunning.

There is an entire arc where a demon lives around humans, pretending to be their friend and mentor, for decades and decades. At the last moment, he betrays everyone so that he can better understand betrayal and malice (or something, been a while since I read it). At the conclusion of this arc that spans numerous characters over something like fifty years, they ask the demon if he ever learned anything. The demon says he didn't, because demons can't ever understand human emotion.

The projection is on full display.

E: to add, yes, Frieren is racist towards demons. She is so because she is an elven immortal who has lived for millennia and has been victim and witness to innumerable atrocities committed by demons that humans forget because these things happened to their ancestors and not them. Really gets the noggin joggin