It depends where I am. If I'm at a spot that's popular, I don't mind at all.
If I'm at a spot in a popular area that hardly gets fished, I either won't fish or I'll make an effort to not catch anything while I'm being watched. An example of this would be a seldom fished area in a steelhead river where I know holds fish but most other people don't. Or a sneaky wading spot on the upper delaware that generally has risers.
It takes work to find spots like these, and they are great spots when you only have an hour or so to fish. To be honest I've snaked some of these spots myself.
If you see someone pop out of their truck, grab a fly rod, with no vest or waders, and make a beeline to a spot, chances are that's a good spot.
First I will address the OP. I normally don't mind either way. I am not sure if I ever taught anyone who was watching me, but I have learned quite a bit by watching others, especially the old timers, which I guess I am now.
Anyway, Moon's post reminded me of one of those moments that started out not so great.
There is a section of the Grand River in Ohio that I knew very well. It is where I caught quite a few Steelhead, including my first one. Along this stretch there are a few big holes that are quite popular, but I always did well in spots that were not so popular.
One day I was just out for a ride with my wife. It was early fall, and I wanted to scout out some spots. We were driving along the dirt road that follows parallel to this stretch. This road is under water several times a year, so calling it a road is a stretch. But it does lead to a small park.
Anyway, I was passing a pickup heading in the opposite direction. Both of us were going quite slow and had our windows open. As we were passing, we made eye contact and I said "how are you doing?" I didn't even stop. It was meant as a friendly hello. The response I got back was just a dirty look. To make this easier to write, lets call him Richard Cranium from Cleveland.
Well, I watched him in the mirror and saw that he parked close to the path that heads down to the biggest and most popular hole.
I turned to my wife and said "watch this."
I parked along the road maybe a couple hundred yards from this guy. I had no intention of fishing that day and didn't even have the fly gear along, but I did have a spinning rod and a tackle box with some bass lures in it. So, I grabbed that spinning rod and said to the wife, I'm going to go catch dinner. She settled in to read a book as I walked to the river (no waders) to one of those lesser known spots I mentioned. This was line of site to the large hole that Richard was likely heading to. I then tied on a jointed Rebel minnow. First cast and WHAM! I saw it coming like a torpedo just under the surface. I reeled it in and left, hoping that Richard was watching.
OK, it was the second cast. First one resulted in a birds nest and barely made it into the water, so I took a mulligan. But in a way, that makes the story even better if Richard was watching. Wife was surprised that I came back so soon. I believe every steelhead I ever caught was on a fly rod, cept that one.