A man is playing the saxophone in the street and some people are sitting on the curb next to the street by him.
A man is playing an instrument on the street near other people.
Saxophone is a type of instrument, and some people by the man shows the man is near other people.
The saxophone is an instrument, and if people are sitting by the man playing it, the man is near those people.
People were sitting near to him is implied as they were people on the curb next to street by him