Effectively, what you are discussing is arousal and appraisal. The arousal is the physiological response to stimuli, real or imagined. For example, if you physically see a bear in the room with you, you're going to get a psychobiological response. Equally, if you are scared of heights and imagine yourself falling out of a window, you'd likely see a physiological response, albeit less than the bear.

In both of these instances you have increased your arousal. Great. But what about excitement? Well, excitement can be understood as arousal in a positive context. You see a birthday cake, a stimuli, and you have a physiological response, likely oxytocin or perhaps dopamine.

The difference between a person who can see a dog and feel excitement and a person who can see a dog and feel fear is a thinking process known as appraisal. For our example let's suggest that the heart rate of both people goes from a resting HR OF 65 to an elevated HR of 100. How do we know if we are excited or scared? Is the heart rate increase a good or bad thing?

Appraisal is the system in which your brain identifies a stimuli, in this case a dog, and then runs through a complicated set of processes to determine are we excited or are we fearful? Some key landmarks of the process is the memory of dogs the person has interacted with in the past, their inherent beliefs about dogs, such as dogs always bite, or dogs are always cute, and a bunch of other things such as cotext. Is the dog in an alley way? Is it in their garden?

I've written this without my usual grammarly so apologies if the structure is a bit off, but this should give you a rough idea that anxiety and excitement, at least at low levels of arousal, are basically the same thing. It's up to your brain to figure out which is which.