I think you all might be using the wrong terminology here. The Observer Effect is a part of quantum physics. I was shocked to learn there was a psychological phenomenon by the same name and went to read up on it, but there doesn't seem to be such a thing and I'm not really sure what you're referencing.
Is there another name you might know this by? Disassociation is the only thing I can find that sounds similar.
No one but you capitalized it. They are referring to what TFA describes ... it uses the phrase "observer sensation" rather than "observer effect", but it is an effect.
Overview effect