Mostly it’s a combination of pressure and stress.
People like to perform and be seen doing well. When you are doing something by yourself you are putting all your attention into what you are doing. When you do it in front of someone, some of your attention goes to reading how they are responding, some of it goes into keeping yourself calm, part of it goes into preparing for failure, part of it goes into wondering how the person will react. Essentially, the more things you have to focus on, the harder it is to succeed.
While adding someone watching you seems like a small change, it adds a whole ton of factors that you start to think about.
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