Ok this is a specifically related to Bardic performance, if it matters.
The rules state:
"Any potential threat to the target allows the target to make a new saving throw against the effect. Any obvious threat, such as someone drawing a weapon, casting a spell, or aiming a weapon at the target, automatically breaks the effect."
And more specifically for the Bardic performance:
"Distraction of a nearby combat or other dangers prevents the ability from working."
So I guess this is a "your interpretation" situation. So let's hear some opinions.
What classifies as "nearby combat"? 5ft, 10 ft, within the battle mat?
Do potential threats include enemies not focusing their attacks on the fascinate creature?
If the creature perceives combat or other dangers, the ability doesn't work. Note that if combat starts while the creatures are fascinated, they have a penalty to Perception for the purpose of seeing it.
Fascination is a great way to set up an ally's sneak attack, so long as the target isn't aware of the rogue before being fascinated. While the rogue must still maintain Stealth, that -4 to Perception makes it much easier. The GM might also add additional Perception penalty if the performance itself obscures perception, such as a particularly loud drum solo (though no fascination is required for that).
pretty straight forward answer I like it.
Thank you.