FWIW, our area has a low-level festival run by the local piano teachers association. My DD did her first piano competition at 7. She was very relaxed and performed beautifully. She won her division and got to perform in a special concert.
The following year when she knew what the competition meant, she was an anxious wreck. Preparation was truly miserable but her teacher thought that DD would be fine once she got tot the competition. At the competition, she only played part of her piece and then blanked out. The judge wrote a heart-felt critique that pointed out that DD was one of the most expressive piano students that she had ever heard and that what she did play, she played beautifully. DD quit piano the following week. I couldn't even get her to do her end-of-the year recital which was scheduled for a month later.
I still run in to DD's former piano teacher. She regrets DD giving up piano because DD had "a lot of potential" and has said to me that it would have been better if DD hadn't done the competition. She wistfully asks if I think that DD will ever come back and I have to tell her "No."
DD now plays another instrument and still loves music. It's now several years later. DD finally will touch the piano. She will play melodies so that she can figure out how they should sound on her other instrument but that's about it.
