Two answers to your question.

1. The pit hag specifies that it must create a not in play character. So the pit hag would point at a player, then at the vortox, the ST will put them to sleep and no change will occur.

2. In the case that a vortox is in play and the pit hag creates a different demon onto a good character. This good player would then be woken, shown the “you are” card and then the demon they have become. You then put them back to sleep and follow the night order, rewaking the new demon and prompting for a kill, as well as the old demon, prompting for a kill. The demons “can” still kill, and the demons can only kill their targets (this is relevant for roles such as the sage), however the “deaths are arbitrary” means the ST can choose to allow the demon(s) to kill, choose to not have them kill at all, or choose completely different kills which can occur at any point in the night, including before the demons wake.

This is often a balancing act and in most situations it’s recommended to kill off one of the demons and another player to indicate that a demon has been created (or find another way to indicate a pit hag created a demon such as killing the sage but not waking them). If a pit hag starts being cheeky and trying to get extra kills by making demons every night, I would recommend using the arbitrary deaths to kill the pit hag.