Speaking a few sentences in front a classroom sized group is pretty normal and kids should be exposed to it. Uncomfortable experiences are a part of growing up.

Both are very important. Not being able to speak in front of a group can change the trajectory of your entire life. Children especially should have as many paths open as possible for when they're ready to decide which one to take.

Both can bring out social anxiety

Generally speaking, socialization is like a muscle. You have to use it to build it. Which is why we have schools introduce people to social settings in controlled settings and with incrementally more difficulty.

"Nobody should ever have to interact with more than a handful of other people at a time" is a recipe for building a population of socially anxious people.

When you cloister kids at a young age, then introduce them to a big school full of more advanced students, you're throwing them into the deep end of the pool late in the game. But just insisting "they're 11 years old! they'll never be social! lost cause!" is infinitely more cruel than weening them into society as best as your system can.