When I was a shop foreman, I had no problem letting people watch. In the end, it was about them being happy, but, the problem I always had was, we were not as fast as they would like. We did just awesome work, but, because we never half-fast anything, it always meant a quick run to the parts store, which would always add an hour to the job. (We did full custom jobs). After a couple customers got charged 3 hours of labour, for a job that took 5 hours, and they complained it took so long, I stopped letting people "hang out" at the shop.
I did have a few customers that were start customers. Watched us work on their truck, had a few comments to change a few things, didn't tell us how to do our job, and let us take the time needed for the job.
Most customers who wanted to watch, wanted us to work as fast as we could, almost guaranteeing a mistake.
That's my rant,
Merrick