I let a stranger watch me work for a day and I've never been more productive

That's one way to see it. Another way is "I've shown that I got some unleashed productivity potential. How can I make it sustainable rather than an exhausting sprint?". In other words "how to make it a habit", habits are easy to sustain

I'm not arguing for having a stranger watching you all the times or that you should only think about productivity, just that it shows that there's a margin for improvement that can't be dismissed

I can't really imagine a job in which someone is bothered to pay you to do work, but cares so little about the work you're outputting that they don't notice whether or not you're working efficiently/effectively.

I've worked from home full-time for just over 5 years now. I'm self-employed and answer to my client directly. I operate almost entirely autonomously and am given a heap of freedom, both tech-wise and with respect what hours I work. I've not once in 5 years reported my exact hours worked - but of course do report days off sick etc.

However, despite my client not being a developer (or overly technically inclined) I can assure you my client still notices if I'm being less productive than usual - which over the course of 5 years is somewhat inevitable e.g. when my daughter was born.

Actually, I find that not having someone knowing that I'm ticking over hours sitting at desk, hitting buttons, and making the screen flash, causes me to work more. For the last 5 years I've consistently worked more hours than I ever did in an office environment, not by a small margin either.

Sometimes you just don't feel "switched on", but if you're working in an office you're still tallying up hours. However, if I'm not totally switched on, I somewhat subconsciously know I need to work longer in the afternoon/evening. This is simply because I feel pressure (am motivated) to live up to the standards I've established with my client. I must add though, that my client is absolutely fantastic, any perceived pressure is almost entirely self-inflicted.

If anything, I need to start setting firm boundaries so that I work less. This means I need to start considering those less productive "hours worked" as genuine hours worked, just as I would if was working in an office.

I’ve had experiences like this with glassblowing. When I have an interested observer, such as a student, I often get enthusiastic and make several pieces in a row and use a wider variety of techniques.

Also, many glassblowers work while hanging out together on video chat.

What if it’s pride and not shame? One may feel like they get to show off how talented or productive they are.

Your argument that it exists _for_ anything is a bit hollow. What do superstitions exist _for_? What does religion exist _for_? What does the shame of being on the LGBTQ spectrum exist _for_? What does fat shaming exist _for_?

That something exists and that people are using it doesn't at all mean that the use is still valid, that it ever was valid, or that there are not much more fruitful alternatives.

Moreover your argument that you need guilt and shame to have a good society is the same sort of argument that Christians use against atheists and their lack of religion. The reason I don't go raise hell is simply because helping other people is what has been burned into my mind as a child. I don't hand a homeless person money because I'm worried about the shame of not doing it, nor do I feel any real happiness from when I do it; I do it because I believe it is my duty (which is the same reason I rarely miss deadlines).