It's not poorly worded at all. Observed means seen. Seen means you are not hidden. Therefore, the question is clearly, to anyone bothering to think it through, referring to going into hiding while someone is seeing you. An observer is only who is already observing.
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He clearly uses observers, so you can try to hide while being looked at.
First, it's absurd to suggest that [MENTION=6787503]Hriston[/MENTION] or I have not bothered to think this through. We each have dozens of posts on this thread that are replete with extensive and articulated thought.
Many people disagree with many other people about many things. It doesn't follow that they've failed to think things through. Sometimes thinking people disagree. (I'll offer Socrates, Plato and Aristotle as famous examples: three thinkers, each of whom had significantly different views about a number of the things they had thought about.)
Second, this is another case of you being careless with language in what you present as a semantic argument.
"Observed" means "seen", but the word "observed" appears nowhere in the Sage Advice -
despite being used in the question that is (notionally) being answered.
"Observer", on the other hand, doesn't mean "seer" - as [MENTION=6701422]Plaguescarred[/MENTION] posted, it
can mean that but can also mean "watcher" or "looker" - and it is notorious that a person who is watching or looking can still fail to see or notice things.
Here is
the Sage Advice; I have bolded what I think are the key load-bearing phrases:
The lightfoot halfling and wood elf traits—Naturally Stealthy and Mask of the Wild—do allow members of those subraces to try to hide in their special circumstances even when observers are nearby. Normally, you can’t hide from someone if you’re in full view. A lightfoot halfling, though, can try to vanish behind a creature that is at least one size larger, and a wood elf can try to hide simply by being in heavy rain, mist, falling snow, foliage, or similar natural phenomena. It’s as if nature itself cloaks a wood elf from prying eyes—even eyes staring right at the elf! Both subraces are capable of hiding in situations unavailable to most other creatures, but neither subrace’s hiding attempt is assured of success; a Dexterity (Stealth) check is required as normal, and an observant foe might later spot a hidden halfling or elf: “I see you behind that guard, you tricksy halfling!”
Here is a repost with those phrases glossed as I understand [MENTION=6787503]Hriston[/MENTION] to interpret them:
The lightfoot halfling and wood elf traits—Naturally Stealthy and Mask of the Wild—do allow members of those subraces to be hidden in their special circumstances even when watchers who might see them are nearby. Normally, you can’t remain hidden from someone if you’re in full view. A lightfoot halfling, though, can be hidden behind a creature that is at least one size larger, and a wood elf can be hidden simply by being in heavy rain, mist, falling snow, foliage, or similar natural phenomena. It’s as if nature itself cloaks a wood elf from the eyes of those who might see him/her—even if the elf is in the field of vision of a potential observer! Both subraces are able to be hidden in situations unavailable to most other creatures, but neither subrace’s attempt to be hidden is assured of success; a Dexterity (Stealth) check is required as normal, and an observant foe might later spot a hidden halfling or elf: “I see you behind that guard, you tricksy halfling!”
The key elements of this glossing are (1) distinguishing between
being seen,
being looked for, and
being in someone's field of vision, and (2) not distinguishing between becoming hidden and remaining hidden. For more on this, see my post 797 upthread.