If you setup a simular setup to the one shown on the screenshot, with the lower piston being sticky, and the observer facing into the normal piston on the left, you will realize, that replacing the bottom torch will work like expected. However, when replacing the right torch, you will realize, that the oberserver block does not turn off (if this is not the case, try to reset the setup and try again).

The reason for this is simple. The observer block is being updated by the torch, which makes it turn on. However, when the piston moves the observerblock, the update, which was intended to turn off the observer block realizes, that the block is no longer an observer block, but a piston arm. This means, that the observer never got the update, which was intended to turn it off.