This stuff would not be worth much.
I take the question to be "how well would a magically controlled fluid of mass 2kg/cubic meter protect a demon from those punches". "Those punches" I take to refer to a "meter wide flying fist 5 meters per second".
5 meters/second is 11 miles per hour so more of a firm shove than a punch; Google states kung fu punches are about 40 miles per hour. For either one, the fluid is the mass of a heavy gas, air being 1.3 kg/cubic meter and CO2 1.8 kg/cubic meter and so I think this fluid can be treated as a gas. In contrast water of course is 1000 kg / cubic meter.
I do not think interposing an amount of this liquid or gas would do very much to slow an incoming fist at any speed based on mass alone. It is just not very massive. I sort of feel bad for the demons if this heavy gas is their armor. Hopefully it smells good or something.