Physical placement isn't important. Psychologically, it's the same. What it means is that for the entire duration there is someone paying close attention to (and potentially judging) everything I do. No downtime, no zoning out, focus and performance for an extended period.

IM notification from an old teammate pops up complaining about my boss? Seen.

Switch to a window with my personal email and they can see that thing I just bought or that recruiter I've been talking to? Seen.

I type a stupid thing that will never work? In the 5-30 seconds before I realize it, seen.

It doesn't matter if I trust my pair. That's not how the brain works.