It isn’t. Demineralized water is exactly what it sounds like – water that has had the trace minerals removed by one of a number of different purification processes. It’s perfectly safe to drink.
However, there have been myths about the dangers of consuming it for years for a couple of reasons. First, most people are used to drinking water with trace minerals, so to many people pure water tastes like, well, nothing, which is both weird and noticeably different from what you’d expect. Second, pure water is slightly acidic, which is why it dissolves those trace minerals in the first place. It’s fine to drink and far less acidic than other things we consume, but it will fairly quickly eat through metal pipes or containers that are in constant contact with it. Third, it’s primarily used for research and industrial applications, not drinking.
You give people weird-tasting water that eats through metal and is used in making car batteries and tell them it’ll also mess with their body and it sounds pretty plausible. I would assume the answer to your original question is that the store/manufacturer put that warning in order to comply with regulations about bottling water for human consumption vs other purposes and/or to avoid frivolous lawsuits, which are expensive and a pain even if they’re completely baseless
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