We study the dynamics of a two-component Bose-Einstein condensate (BEC) of $^{174}$Yb atoms coherently driven on a narrow optical transition. The excitation transfers the BEC to a superposition of states with different internal and momentum quantum numbers. We observe a crossover with decreasing driving strength between a regime of damped oscillations, where coherent driving prevails, and an incoherent regime, where relaxation takes over. Several relaxation mechanisms are involved: inelastic losses involving two excited atoms, leading to a non-exponential decay of populations; Doppler broadening due to the finite momentum width of the BEC and inhomogeneous elastic interactions, both leading to dephasing and to damping of the oscillations. We compare our observations to a two-component Gross-Pitaevskii (GP) model that fully includes these effects. For small or moderate densities, the damping of the oscillations is mostly due to Doppler broadening. In this regime, we find excellent agreement between the model and the experimental results. For higher densities, the role of interactions increases and so does the damping rate of the oscillations. The damping in the GP model is less pronounced than in the experiment, possibly a hint for many-body effects not captured by the mean-field description.