I had the same experience as you with these two game demos.
So far as I know, you can turn "tmpfs in RAM" off in VASM --> HARDWARE --> HWSET and then the error shouldn't happen, because /tmp in not mounted in memory (if I'm not mistaken). I didn't try that though, and only specified a different target for uncompressing, as you say.
My approach is to have it on all the time. If something needs a lot more space in /tmp then you need to turn it off or specify a different temporary target.
But I guess, I'm just repeating what you said...