@Nicole_R, Thanks for posting in Q&A. Based on my researching, O365 Demeter is one of the service principals created automatically when a new Azure tenant is set up. Its primary function is to support various internal operations within the Office 365 environment. Specifically, it helps manage and facilitate the integration and communication between different Office 365 services and components.
For more detailed information, you can ask in the following Microsoft 365 forum
Hope the above information can help.
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