Why does the presence of others cause increased performance in some situations and decreased performance in others?

Explanation
This is based on the The Yerkes-Dodson law, which when applied to social facilitation, indicates that when there is presence of other people, we tend to do well in the activities to which we are more familiar with, but on the other hand, we tend to struggle with those which we have less knowledge of

In this context, with the familiar tasks, we are more willing to show others about our capabilities, which in turn increases our motivations and determination as a result of the needed approval

however, when handling challenging and difficult tasks, stress tends to build up, and we may struggle to handle them effectively

this means that the level of stress plays a key role in our performance levels, in that it can push us to performance poorly when we are under pressure

Answer
This is because performance has a positive correlation with mental and physiological arousal or stress, but this is only to a point. when the level of stress is too high, performance is decreased