Your wondering about observer argument is not wrong, as it can on,y be understood by experiencing it. Witnessing is another term used for this term ‘observer’. From my own personal experiences I am trying to clarify it to my best for you.
Consciousness is pure awareness or pure witness or pure observer. The moment no-mind state coincides with no-ego state than this observing happens and the observer is being observed. It is like looking yourself inside through an invisible mirror created by intense meditative state. Meditation helps in bringing no-mind state and in the moment of intense no-mind state the ego drops by itself and that experience happens. The intensity of no-mind state depends upon the sacrifice/yearning you have made to make it happen in this life itself. You can learn simple awareness meditation from where I learned and practiced it during brushing my teeth in the morning, and over time it engrossed all my activities. https://youtu.be/tEO87hvh8kE