An official ruling, especially one as old as the ruling for "Demotion" is never incorrect, unless an official errata is released overturning a pre-existing ruling.
As such, the ruling for "Demotion" stands.
With that being said, "Demotion" is a highly obscure card, and unfortunately - it is the only level-reducing card which has this ruling....
As such, it is incredibly easy for player's (and judges) to over-look "Demotion", and come to the conclusion that what happens in this situation is up to the head judge.
It is my personal opinion that the ruling for "Demotion" which states that a monsters level cannot be reduced below 1 should be added to all level-reducing cards and effects (Cost Down, Level Conversion Lab, Silent Strider, etc), as it is common knowledge among experienced duelists and judges that this ruling is universal.... and as such, adding it to all such cards with this effect would make our jobs that much easier.
TBH, I myself was having difficulty remembering the name of "Demotion"..... In my original post, I had listed it as (the equip spell which reduces the equiped monsters level by 2).
Since I could not remember its name, I could not look up its ruling until after another poster reminded me of its name.....
Since "Demotion" is the only card with this ruling, had this situation come up in a tournament, it would have been nearly impossible for me to find said ruling using Netrep, the Official Judges List, or the Individual Card Rulings FAQ (since all such rulings reference the card name).
No one's been able to take me seriously... But that will change when I beat you at a children's card game.