They said Severus had been watching from the bushes, but he hadn't. He had actually been trying to gather black beetles for a potion he was going to brew later on. How was he supposed to know Lily and James would chose to make out on the other side of the bushes?
Lily had shouted at him for invading her privacy. Severus had wanted to cry. James hexed him. Severus cried. In front of everyone. It was humiliating.
The only thing that made it okay was seeing Lily yell at James for hurting him. Severus hoped they would break up.