The instructor is responsible for the safety of the trainees. It therefore follows that the instructor must make certain that the trainees are out of danger whilst demonstrations are being carried out. There is a simple way to achieve this:
Some lessons require the trainees to move during the demonstration. If this is the case the instructor should explain that this will happen before the demonstration takes place and then, at an appropriate point during the demonstration, the instructor can tell the trainees, "please move down there......." or wherever.
For safety reasons it's important that the instructor keeps control of the trainees at all times and does not let them wander around and possibly into danger. This may mean being quite strict with some people but so be it.