This was a fun kind of Hi-Fi rush vibe! The combat was neat, and I enjoyed the combo system.
I'm not sure if I understand the need to put away your weapon and take it out - I think the game could potentially be streamlined to just have one state for your character, but I could see that changing if you included multiple instruments to switch between.
As this is a rhythm game, I feel like it kind of lives or dies by it's music, so it might be nice to add some variation to the sounds that play whenever you are attacking - when you switch back and forth between heavy and light attacks the audio sounds a bit repetitive. This might also be solved with fuller background music instead of just a beat, but I'm sure that is something you're actively working on. As of now, though, the combat is pretty fun :)
Other than that, there were a couple times when the characters in the game said to use the left trigger when it should have been the right trigger, and I think I broke the sequencing at some point during the demo - I accidentally went the wrong way and got very lost at the end.
I really like the aesthetic, though, and I could absolutely see this becoming something cool. I'm a sucker for a fake MMO, so knowing that's the universe of the game is also exciting. I need to try your other project in that world!
Played it a bit on stream around 2:30:10