This is a very interesting question. People usually do not consider this fact when discussing a production or anything done in public. People usually only think about the content and form of a work. In light of this, you ask a very intelligent question.
The audience does make a difference. We need to realize that as much as people are spectators, they are also being watched. For this reason, all people are performers to a certain extent. We can say that all people are actors and actresses in a sense. For this reason, watching something is isolation takes away the performative aspect. A person, therefore, can be more honest.
In a group setting, there is peer pressure, the pressure to conform, the pressure to fit a certain role, and the like.