The fear in itself might not be totally irrational, in the sense that it seems beneficial to have the capacity for this type of fear (for evo psych reasons, etc.)
However, I'm sure you'll agree that the fear in its context is irrational (which is what defines it as an anxiety disorder).
Why do you care what other people think?
THAT'S NOT HOW MENTAL HEALTH PROBLEMS WORK.
1) it's how mine worked.
2) https://en.wikipedia.org/wiki/What_Do_You_Care_What_Other_Pe... (probably would have worked better had I quoted it properly.)
For me it's a catch 22 as well. If I'm not feeling socially anxious then I'm relaxed and it's easy to have confidence. Then there is nothing to fear and I'm not reading into anything or taking anything personally and it's all very easy and fun. But if I'm feeling socially anxious then I'm more likely to come across as unfriendly or weird, read too much into social cues and feel negatively about myself at the end of the interaction. Which feeds the cycle.
Something that helps a lot is meditation and being in the now. It's very hard to be in the now during an anxious social situation, because your brain is trying so hard to distance itself from the situation and get you out of it with minimal damage. But acceptance of the situation and reminding yourself there's no lack and literally nothing to fear in the present moment can help. And definitely presence after a (maybe just perceived) negative social interaction can help a lot as well to break down the cycle.