Sprint Review vs product walkthrough

The terms "demo" or "demonstration" do not appear in the definition of the Sprint Review. Although a demonstration of the product is one way that the team may "present the results of their work to key stakeholders" or "review what was accomplished in the Sprint", it's not the only way to do these things. There is also plenty of information flowing back from the key stakeholders to the team - discussions of what has changed in the environment, feedback on the state of the Product Backlog, feedback on the any Increments released since the last Sprint Review.

The work that gets reviewed at the Sprint Review is work that meets the Definition of Done. The Scrum Guide states that "if a Product Backlog Item does not meet the Definition of Done, it cannot be released or even presented at the Sprint Review." Although I don't fully agree with this assessment - there are definitely risks to showing undone work, but there are also benefits - the definition of Scrum suggests that anything that team has in their Definition of Done needs to be accomplished prior to the Sprint Review. The only question that remains is if there should be a formal walkthrough between the Developers and the Product Owner or if there should be sign-off on work to be Done, but those are both other questions to consider.

Generally, early feedback is better than late feedback. So if the Developers are able to get feedback from the Product Owner or especially key stakeholders earlier than waiting for the Sprint Review, that would be beneficial to making sure that the product is continuing to evolve in the right direction. However, if the Sprint Review is the earliest opportunity for that feedback, then the team can use that and perhaps consider working with the key stakeholders on ways to get earlier and more frequent feedback.

My understanding is that part of this ceremony is dedicated to the development team to showcase the completed work for the sprint to stakeholders. 

Where did you get this understanding from? It doesn't sound like it originated from a reading of the Scrum Guide.

Some things to consider:

• The Sprint Review is an event, not a ceremony
• Each event in Scrum is a formal opportunity to inspect and adapt something. There may also be other opportunities.
• A Sprint Review is a collaborative working session, in which participants inspect the work that has been Done, and any work that remains to be Done.
• There may -- or may not -- be a "demo" of Done work for inspection purposes.
• The key adaptation in a Sprint Review, and its critical output, is an updated Product Backlog.

Should this demonstration not have already occurred with the Product Owner and scrum team as part of a product walkthrough process to sign-off work before it is marked as 'Done'?

If that is part of your Definition of Done, sure.  But I would ask if the Product Owner is the right person to be doing the review.  The Scrum Guide states 

The Scrum Team presents the results of their work to key stakeholders and progress toward the Product Goal is discussed.

Is the Product Owner the only key stakeholder?  The reason stakeholders are involved is so that the Developers can get feedback from the audience for which the product is being built.  Also remember that all stakeholders are not going to be external.  Sales has a stake in the product, Marketing has a stake, Support will have a stake and so do the end users.  You should be involving as many stakeholders as possible in the review of the work that is being done. 

There is nothing stated in the Scrum Guide that says the Sprint Review is the only time to gather feedback.  In fact, it is presented that stakeholders should be involved in the process as much and as often as possible. 

Should this demonstration not have already occurred with the Product Owner 

Yes. Product Owner is also part of Scrum team and whenever the developers deemed a story is 'Done' better that is reviewed anytime before end of the sprint. Particularly when 'Done' stories are released to production upon Continuous Delivery. In such cases, Instead of demonstrating(or re demonstrating) the released increments in Sprint review, the Scrum team can discuss the feedback from users for those increments with stakeholders and adapt Product Backlog accordingly.

Thanks for the responses everyone. The purpose of the Sprint Review makes a lot more sense now!