I personally would not use a stand in model when painting a demo. People walking by will have one thought and that will be, "Boy, that painting doesn't look like that guy at all!" Really, they won't stop to think that maybe the model is an understudy.
If the whole thing is making you nervous, don't demo. That way you can just stand there, be charming and talk to people about your finished works. An artist who's demonstrating but is nervous is much less effective than an artist who's not demoing but is relaxed and talking confidently with people who stop by, I think.
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