The memory loss (to tie back to the OP and stop talking about addiction which this was never about), can really be caused by the benzo without being dementia. Dementia is a quite specific thing which leads to cell death in the brain. There is nothing really saying the forgetfulness one can get on benzos is dementia. Forgetfulness does not equal dementia.

I have this bit vile sleep med that actually is known to be "amnesic". It does make me forgetful. But I only take it off and on and when I don't take it, my memory is OK. Dementia does not work like that. It does not come and go with taking the med.

This is a side effect. It is not dementia.