I'm under the belief that this should be titled: "how do I pause a video demo while recording in Captivate8"?
In chapter 4 of the help file, captivate reference.pdf, titled "Recording Projects" has a section titled: "Pause while recording projects," which states:
You can pause while recording an Adobe Captivate project. Any action performed after a project is paused is not recorded.
1 Open Adobe Captivate and begin recording a new project or slide.
2 When you want to pause recording, press the Pause/Break key (on Windows) or Cmd + F2 (on Mac OS) on the keyboard. When you want to restart recording, press Pause/Break or Cmd + F2 again.
Note: You can change the keys that you want to use for pausing or resuming projects in the Preferences dialog box.
You may want to view the Preferences dialog box to view the keyboard shortcuts for recording in Captivate.
Have you actually tried using the Pause key with a Video Demo? I don't think you will find it works the same way as it does with normal screen by screen capture.
What's the solution then? Of course, the Pause key doesn't work. Settings has an area where we can set keys to stop recording, but there is no pause key mentioned there. Sick of all the comments saying the same thing without actually testing the solution.
The 'solution' is that Captivate currently has no ability to pause a Video Demo. You can Start it and Stop it but not Pause it.
Maybe that's something you could log with Adobe as an enhancement request.