As you've noticed, the Classic Demo does have realm sharding. This is to let as many people as possible experience it without technical issues such as server capacity or spawn density getting in the way.
Longer term, we know how crucial it is to the Classic experience for you to see your friends when you walk into Stormwind or when you’re helping them on a quest you’ve already completed. And there should only ever be one Kazzak on a realm, no matter how many people are waiting for him to spawn.
We’re still looking at how we can best deliver an authentic Classic experience at launch, and in the weeks and months that follow - both in terms of gameplay and community. You won’t see phasing (which is tied to specific quests that don't exist in Classic) or cross-realm zones (which combine multiple realms together) in Classic. However, realm sharding is one of the best tools we have to keep realms stable when hundreds of players are swarming the same initial few zones and killing the same few mobs (like they will be at the launch of Classic). To that end, we do believe that some form of sharding may be helpful, especially in those early days. But we recognize that a cohesive world is critical to WoW Classic and are committed to bringing that to you.