Our personal lives are exposed to God, but He doesn't get all bent out of shape about the things we sometimes do that aren't becoming to Christianity. Yet we do these things and sometimes we are convicted ... sometimes not. Mostly we are convicted though.
If (and when) we know that somebody up there is watching everything we do, maybe the next time we won't be quite so anxious to do something that's borderline. Hopefully there will not be a "next time".
There isn't anyone wielding a big club to use on us or anything like that when we mess up. But our conscience, our spirit man, will tell us that there is an audience watching us.
God is trying to grow us up ... make us to be mature Christians. We can't do this on our own ... it's got to be Him.
This also separates the believers from His Presence. We desire to stay in His Presence so we must keep a watch on the things we do and what we say. It only takes a moment of time to change one way or the other.
Reverend Robert W. & Mary C. Butler