The underlying physics of this is really the underlying physiology. The different cells in the retina are sensitive to different colors of light, and when we see a color it is because of the comparison between the responses of those different cells in the retina. So a simple way to describe that is that the two sources of light have to be close enough together that they look like one point of light to us, and then the color we see is the color of that light. In other words, it's determined by the resolution of our vision.

The resolution of our vision is partly determined by the density of receptors in the retina, but it's also determined by how well we can focus. If you have red and green LEDs right next to each other, some meters away, and you can still see them as two separate leds you could make them merge into one yellow light by either taking off your glasses if you need glasses to see them, or putting on glasses that are wrong for you, to make the view blurry. Or you could simply walk further away from them until you only see one point of light, and that you will see it as yellow.

A common place to see this effect is on a large, but not very high resolution television screen. If you get up very close to it you can see the individual pixels, and for many display technologies, you will see them as individual red, green, and blue pixels, rather than as a full range of colors including yellow. If you don't have an appropriate display where you can see that, you can use a magnifying glass with a higher resolution display, even a phone.