I think you make a pretty good point. This experiment is meant to be about privacy, but there's a good chance that the subject are actually reacting to him moving into their personal space and refusing to leave.
it's probably a combination of the two that makes it so unpleasant for the "victims". If he was there without a camera this would be immediately seen as aggressive behaviour. If he was filming them from a distance, they'd either not notice or probably not really care, he'd come across as a non threatening weirdo. But by getting up close with a camera, the unfortunate subject simply doesn't know how to react, the weird middle ground is deeply unsettling.