I was involved with left wing groups in Norway in the early 90's, and pretty much everyone I knew who were a bit older than me either flat out knew, or had strong reasons to believe, they were under active, blatantly illegal, surveillance (the evidence finally came to the surface in the mid 90's after decades of insisting there was nothing going on). This included intimidation on open street (a former editor of the communist party newspaper told me how he regularly had intelligence officers walk up to him in public and recite portions of conversations he had had with his wife in their flat the previous day, in order to taunt him and make it clear to him he did not have any privacy; a trade union organiser I met whose commute had him walk past the Soviet embassy told me of how he had a too-obvious-not-to-be-intentional tail to and from work every day for years).

It pushed people away, and it made many of these groups act in ways that were detrimental to their ability to carry out their political works (e.g. keeping tight security around member lists; many member who would not talk about their involvement in public etc.). It had a massively negative effect on getting these small groups to cooperate, because cooperation involved meetings with untrusted people. Etc.

Overall, the mere perception of the existence of pervasive surveillance does massive damage to democracy.