I don't think your engine builder is unreasonable. As others said there are many reasons not to have customers in the shop, including liability, distraction to the workers, lost time to answer questions or even disagreement on how the work is being performed. If you do not trust the guy to do good work without you watching, then you need to look for someone else.

That being said I think it would be reasonable to ask to see progress at certain points in the build and set a specific time or have him call you when those points are complete. Questions about how things will be done are also reasonable. But be sure you are available so as not to delay him or waste his time waiting for you to show up.

A mechanic friend of mine had a Labor Rates sign in his shop

Labor $40 per hour
You watch $60 per hour
You help $80 per hour
You worked on it first $200 per hour

Pat