Lee Litzenberger in War On The Rocks on the possible reasons for Russia to avoid foreign observers at military exercises:
Russia pursues this destabilizing behavior, possibly out of a belief that its interests are served by being provocative. There may be several reasons for this. First, Russia may believe that the lack of transparency keeps the West guessing about its intentions, projecting an image of Russia as an unpredictable and potentially dangerous adversary. Second, limiting transparency enables Moscow to carefully script the narrative surrounding its exercises. Such scripting allows it to control how it reveals new weapons systems, maximizing their impression and masking their potential flaws. This helps the Kremlin avoid embarrassments such as when the new Russian T-14 Armata battle tank stalled on Red Square during the Victory Day parade rehearsal in 2015. A similar incident at Zapad 2017, where a Russian helicopter accidentally fired at spectators, illustrates the risk that transparency poses for Russia. Russia may also believe that designing its exercises to be provocative and intimidating maximizes their deterrent effect, even if it does so at the cost of increasing tensions in Europe.
Or perhaps it’s just about keeping the options open. It’s a lot easier to benefit from surprise if spontaneous force mobilization falls within the established normal behavior.