why does smiling all the time make people nervous when theyre looking at you?

Any unnatural behavior makes others nervous - it signals something abnormal (and therefore worrisome) about the person.

Sometimes I do this, with the intention of giving the impression that I know something that they don't. Especially about the subject they are expounding on.

They may imagine that person is mentally unstable.

Also they realize many people have a fake happy face to fit in.