The 28-year-old singer got engaged to the 'Young and the Restless' star in July after just four months of dating, and chose to call time on their romance earlier this month.
And now, sources have said Demi decided to call off her engagement when Max, 29, became ''wrapped up'' in fame after dating Demi made his public profile ''shoot up''.
One insider said: ''It was very hurtful to Demi when she realised that Max's intentions weren't genuine. Breaking off the engagement was not an easy decision.''
Whilst another added: ''Demi and Max were basically together 24/7 for months. They lived in a bubble with zero stress and everything was just fun, [but] Max shot up in fame, and it's been hard. He got wrapped up in [Hollywood].''
The 'OK Not To Be OK' hitmaker also reportedly believes she ''made a mistake'' when it came to accepting Max's proposal.
The source explained to People magazine: ''[Demi believed Max was] trying to further his career by using her name behind her back. It was hard for Demi to admit she made a mistake when it came to Max.''
Meanwhile, sources recently said Demi - who is yet to publicly comment on the split - wants ''nothing to do'' with Max now.
They said: ''Demi wants no contact with Max at this point. She is completely embarrassed at the way he's been acting and putting their relationship on blast via social media. She wants nothing to do with him.
''Demi is completely done and doesn't want to see him again at this point. She can't believe she fell into his trap and is really upset over it.''
Since their split, the 'Anyone' singer has been leaning on her family and friends.
The source added: ''She's been spending a lot of time with her family and friends to help heal from this and they are all keeping her occupied and rallying around her.''
We want to speak to the Grammys manager...