> don't consider it "being monitored" when the person you're talking to is the one doing the recording

Compromise is reached in quiet, safe places. Politicians make bombastic statements for their base and donors, and then go behind closed doors to negotiate. You can't negotiate in earnest if every offer for compromise you put forward immediately results in (a) the losers of that compromise creating a ruckus and (b) your opponent using (a) to weaken you.

Public negotiations reward playing to the audience. (You see this in small groups–letting leaders or the people in a friend group who disagree pull aside almost always solves the problem better than litigating it as a group.) If every conversation might be recorded for replaying to a third party, then every conversation will be treated as an open one. That destroys room for compromise.