Acharya Prashant explains that the fear of losing one's image in front of others arises because our self-image is not truly our own; it is a secondhand concept supplied by others. We do not look at ourselves directly but instead view ourselves through the eyes of others, making us vulnerable to their opinions. This dependency on external validation means that our self-concept can be easily destroyed or distorted by the world, leading to constant anxiety and fear. He illustrates this with an example of a student who believed he was a leader simply because others told him so, highlighting how people often lack firsthand realization of their own qualities.