Here's a screen grab of the kind of scenario I'm talking about:



The German plane in that shot (me) took a hit to the engine!

Another observer fire issue:

A fighter just behind the tail of the observer's plane doesn't block his line of sight to a target further back. According to the rules, that's should be one of the few cases where line of sight matters for observers. Here's a screen shot of that situation:



The Bristol F.2B's observer shot the German fighter through his teammate (for lots of damage, since this is the rare case where there's no deflection modifier).