I almost hate to say it but that "King as Bill Cipher's reincarnation with amnesia" from the AXOLOTL prophecy in the Gravity Falls Choose Your Own Adventure Book really makes sense.
1. With even a little bit of power (just being a normal human instead of a puppy thing), he immediately aquires minions and starts wreaking havoc, causing mass chaos, and shuffling the functions of every hole in people's faces.
2. Remembers being an all powerful king of the demons.
3. If that's true and not a delusion, his powers and some/most of his memories have been stripped from him somehow.
It fits an all powerful trillions of years old demon being stripped of its powers by an Uber-God as punishment and a chance at redemption to make Bill a puppy and put him with some "good" characters to learn humility and empathy, but start to slip back to his old ways if given the chance.
Of course, if even a vague allusion to Gravity Falls isn't allowed, the non-GF form could still be the same: he really was/is the King of Demons, and his powers were taken or locked away somehow, but he could be very dangerous and maybe evil if he had the opportunity again.