Don’t know how the scene was set up off broadway, but here the context for the song was that they were filming it in the school, against the rules, as a sort of way to spite Brother Baxter (the idea originates with Conor and Darren after the washing off makeup / head in the sink scene). Conor/Darren tell the rest of the band that they have permission to do so even though they don’t. They do it, have an amazing energetic performance, and you see Barry sort of lurking on the side.
When the song finishes, Brother Baxter catches them, makes Darren give him the tape & smashes it, takes the video camera and says it’s going to the junkyard, tells Eamon he’s going to call his dad, etc. Hard moment for everyone. All the boys who thought they had permission are obviously pissed at Conor/Darren and the band essentially breaks up. Barry interrupts and sort of distracts (?) Brother Baxter in the moment to get him away. To Conor, this is seen as Barry’s redeeming moment and referenced by him later. I didn’t get the point though because they still all got in trouble. Maybe I missed something
Not sure if this is all known to everyone on this thread already but since it’s different than the movie I thought I would mention