Given the following system :
\begin{align*} \text{minimise } z = &2x_1 &+ 3x_2 &+ 3x_3 &+ x_4 &- 2x_5& \\ \end{align*}
Subject to \begin{align*} & x_1 &+ 3x_2 & &+x_4 &+ x_5 &= 2 \\ & x_1 &+ 2x_2 & &- 3x_4 &+ x_5 &= 2 \\ - &x_1 &- 4x_2 & +x_3 & & &= 1 \\ \end{align*}
with $x_1, x_2, x_3, x_4, x_5 \geq 0$
There should be Phase I and then Phase II of the simplex method.
Q1 - how to explain why Phase I is required here
Q2 - how to know which rows should have artificial variables added
For question 1, the objective function can be written as
\begin{align*} -z + 2x_1 + 3x_2 + 3x_3 + x_4 - 2x_5 = 0\\ \end{align*}
The way that the system is initially set up has basic variables $x_3$ and non-basic variables $x_1,x_2,x_4,x_5 = 0$.
Meaning the objective function is
\begin{align*} -z + 3x_3 = 0\\ \end{align*}
Or
\begin{align*} z = 3x_3 \end{align*}
Why is this an issue?
For Question 2 I'm not sure what to consider.
Point (2) in OP's comment is very near to the an answer.
For each of the first two constraints, there's no decision variable
For a concrete counterexample, you may consider the third row, in which $x_3$
Therefore, in general, the first two rows need artificial coefficients.
Remarks: Observe that $\begin{vmatrix} 1 & 3 & 0 \\ 1 & 2 & 0 \\ -1 & -4 & 1 \end{vmatrix} \ne 0$ and $\begin{vmatrix} 0 & 1 & 1 \\ 0 & -3 & 1 \\ 1 & 0 & 0 \end{vmatrix} \ne 0$, so you may actually solve it as in linear-algebra in exams/tests so save the trouble of doing phase I. However, finding initial BFS like this is never a general method.