Demands are updated to "Approved" state automatically after Project is created from it, despite Demand being completed.
The logic that is updating Demand State to "Approved" upon creating a project from it is hardcoded in (DemandToProjectCreationHelper) script include below:
Specifically Line 62 which updates a Demand's state to "Approved" when a Project is created via "Create Project" related link:
demand.state = '8';
The value 8 corresponds to "Approved" on the (dmn_demand) table: